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# OAR Box 1778 Prepped by Ollie Stewart



### Document

Number: 

# 248 ) II-F-1 3
Docket Number: 

# A-90-0 6

Printed 10/28/20089:51:03 AM Sheet 248of 276P. 2

*

. ' ' * •a.osr^ a o * '<:? H A r o E ^ 0 y UNITE D STATE S ENVIRONMENTA LPROTE u WASHINGTON , D.C

. 2046 0 LEEE 

### Ol2J II-F-1 3

May31 , 199 1

MEMORANDU

M SUBJECT : WEPC

O Legislativ eRul e

TO : 

# r\A l FROM : WilliamF . Tyndall , Attorne y

Ai r an d Radiatio n Division , LE-132 A Se e Belo w OFFIC E O F GENERA L COUNSE L

Enclose d i s a copyo f th e "WEPCO " legislativ e rul e incorporating th e change s agree d t o yesterdaydurin g ou r meeting
. (Pleas e not e tha t th e wor d "Administrator" , wa s replace d wit h "reviewing authority " i nsevera l place s i nth e Part_,5 1 regulations. ) r^^lTTT^ ! % JfV \ 

### LL [ijkJy^--^'~ .E

i

' • X'f^^ ^ "a \ Enclosur e Addressees : Richard Schmalensee , Counci l o f Ecdnomic^A'dvisor s Howard Gruenspecht , Counci l o f Economi c Advisor s Teres a Gorman , Whit e Hous e Staf f Ar t Fraas , Offic e o f Managemen t & Budge t Jef f Holmstead , Whit e Hous e Counsel' s Offic e Jonathan Wiener , Dept . o f Justic e Pau l Bailey , Dept . o f Energy Davi d Rivkin , Dept . o f EnergyP. 3

ENVIRONMENTAL PROTECTIONAGENC Y 4 0 CFRPart s 51 , 52 , an d 6 0 [FRL • ] Requirement s fo r Preparation , Adoption , an d Submitta l o f Implementatio n Plans ; Approva l an

d Promulgatio n o f Implementatio n Plans ; Standard s o f Performanc e fo r Ne wStationarySources . AGENCY : Environmenta l Protectio nAgenc y(EPA) . ACTION : Notic e o f Propose d Rul e SUMMARY : Th e applicabilit yo f th e ne wsourc e requirement s o f Titl e I o f th e Clean Ai r Ac t (CAA ) t o physica l o r operationa l change s a t electri c utilit ygenerating unit s i s a nissu e o f considerabl e interes t a t thi s time becaus e o f th e recen t passag e o f th e 199 0 Clea n Ai r Ac t Amendment s (CAAA) . Manyutilitie s wil l b e undertakin g majo r pollutio ncontro l project s a t thei r unit s i n th e nex t fewyears . I n enactin g Titl e IV , Congres s di d
no t suspend an

yTitl e I requirement s fo r thi s work . However , th e massiv e industry-wid e undertaking s o f pollutio ncontro l project s warrant s a clarificatio n o f th e ne wsourc e revie wrequirement s o f Titl e I . I n particular , Ne wSourc e Revie w(NSR ) provision s shoul d
no t inadvertentl ybia s a utilit ytoward s o r agains t an ymean s o f complying wit hth e aci d rai n provisions
. Th e EPAbelieve s th e amendment s propose d todayan d th e clarificatio n o f it s curren t polic yunde r it s presen t NS Rregulation s provid e adequat e assurance s tha t utilitie s ca n undertak e Titl e IV pollutio n contro l project s withou t uncertaint ya s t o th e applicabilit yo f th e variou s Titl e I ne wsourc e requirements
. A t th e same time ,P. 4

- 2 - th e applicabilit yo f existing ne wsourc e regulation s t o modification s ha s bee n th e sourc e o f tw o recen t federa l appellat e decisions , Wisconsi n Electri c Powe r Co . v . Reillv
. (WEPCO) , 89 3 F.2 d 90 1 (7thCir
. 1990) , an d Puert o Rica nCemen t Co . v . EPA , 88 9 F.2 d 29 2 (1s t Cir
. 1989) . A s a result , EPAi s todayproposing clarifying amendment s t o thes e regulation s an d confirming it s policie s regarding o f some o f thes e provision s a s the yappl yt o utilit yproject s pending adoptio n o f th e propose d amendments . Th e EPAtodaypropose s t o adop t a broa d NS Rexclusio nfo r utilit ypollutio n contro l project s and , unti l thes e propose d regulation s ar e adopte d i n fina l form , t o adher e t o it s polic y tha t ne wsourc e regulation s alread ygenerall yexclud e coverag e o f pollutio n contro l project s undertake n a t electri c utilit yunits
. Similarly , EPAtodaypropose s t o adop t a n"actua l t o futur e actual " methodologyfo r determining whethe r al l othe r nonroutin e physica l o r operationa l change s *a t utilitie s (othe r tha nth e replacemen t o f a unit ' o r additio no f a ne wunit ) ar e subjec t t o ne wsourc e revie wunde r eithe r preventio no f significan t deterioratio n (PSD ) o r nonattainmen t provision s an d t o maintai n i n th e interi m

tha t thi s methodologyi s applie d wher e th e uni t ha s "begun norma l operations. " Fo r thos e utilit yproject s whic h underg o PS D ne wsourc e review , today' s notic e propose s a presumptio n tha t fo r EPA-issue d permits , "low-NOxburners " can satisf yth e bes t availabl e contro l technology(BACT ) requirements
.P. 5

,y t

- 3 - I n addition , EPAals o propose s t o modif yit s regulation s implementing th e modificatio nprovision s o f th e Titl e I ne w sourc e performanc e standard s (NSPS ) program t o provid e tha t a utilit ymayus e fo r it s pre-chang e baselin e th e highes t hourl y emission s rat e achievabl e a t an ytime durin g th e 5 year s prio r t o th e physica l o r operationa l change . Th e EPAals o propose s t o modif yit s regulation s t o reflec t change s mad e b yCongres s i nth e 199 0 Amendment s t o th e applicabilit yo f ne wsourc e requirement s t o clea n coa l technology(CCT ) an d repowering projects , an d t o "ver yclean " units
. DATES : Comments . Comment s o nth e revision s propose d today mus t b e receive d o n o r befor e . (6 0 day s afte r publicatio ni n th e Federa l Register)
. Publi c Hearing
. Apubli c hearing i s schedule d fo r 10:0 0 a.m. , Jul y, 1991 , a t th e U.S . Environmenta l Protectio n Agency , 40 1 M Street , S.W. , Washington , D.C . 204,60 . Th e hearin g mayb e cancele d i f n o speaker s hav e requeste d tim e t o presen t thei r comment s 1 5 day s prio r t o th e schedule d hearin g date . Writte n comment s i n lie u o f testimon yar e encouraged . ADDRESSES : Supporting informatio nuse d i ndevelopin g thi s propose d rul e i s containe d i ndocke t A-90-06 . Thi s docke t i s availabl e fo r publi c inspectio n an d copying betwee n 8:3 0 a.m . an d 3:3 0 p.m. , weekday s a t EPA' s Ai r Docke t (LE-131) , RoomM-1500 , 40 1 MStree t S.W. , Washington , D.C . 20460 . Areasonabl e fe e may b e charge d fo r copying
.P. 6

- 4 - FORFURTHE RINFORMATIONCONTACT : Chebryl l Edwards , Ne wSourc e Revie wSectio n (MD-15) , Offic e o f Ai r Qualit yPlanning an d Standards , Researc hTriangl e Park , Nort hCarolin a 27711 , (919 ) 541-2343 . SUPPLEMENTARYINFORMATION : I . INTRODUCTION Th e EPAtodaypropose s t o amen d it s regulation s implementing th e variou s Titl e I ne wsourc e requirement s governin g physica l o r operationa l change s a t electri c utilit ygeneratin g units
. Specifically , thes e propose d change s ar e bein g issue d t o clarif y th e coverag e o f th e NSPS , PS D an d nonattainmen t preconstructio n revie wrequirement s o f Titl e I o f th e Clea n Ai r Ac t t o project s undertake n a t electri c utilit ystea mgeneratin g units. 1 _- ~ Th e EPApropose s t o amen d th e definitio no f "majo r modification " i n 4 0 CFRPart s 5 1 an d 5 2 t o se t fort hth e condition s unde r whic hth e addition , replacemen t o r us e a t existing electri c utilit ygenerating unit s o f an ysystem

o r devic e whos e primaryfunctio ni s th e reductio no f ai r pollutant s (including th e switching t o a les s pollutin g fue l wher e th e primarypurpos e o f th e switc hi s th e reductio no f ai r pollutants ) wil l o r wil l no t subjec t th e sourc e t o preconstructio nreview
.

1 Th e propose d regulation s defin e electri c utilit ystea m generating unit s a s an ystea melectri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n 2 5 MWo f electrica l outpu t t o an yutilit ypowe r distributio nsystemfo r sale . See , e.g . , propose d 4 0 CFR51.165(.xx) .P. 7

- 5 - Specifically , EPApropose s i n PS D an d nonattainmen t area s t o adop t a regulatoryexclusio n explicating it s authorit yunde r th e statutorydefinitio n o f modificatio n an d confirmin g EPA' s curren t practic e tha t pollutio n contro l project s whic h"d o no t rende r th e uni t les s environmentall ybeneficial " ar e no t "physica l o r operationa l changes, " an d hence , ar e no t modification s fo r th e purpose s o f Part s C an d D o f Titl e I an

d ar e no t "majo r modifications " fo r th e purpose s o f EPA' s regulation s implementing thos e provisions
. Th e EPAi s todayals o proposin g t o amend it s . PS D an d nonattainmen t ne wsourc e revie wregulation s (4 0 CFRPart s 5 1 an d 52) 2 a s theyappl yt o utilitie s t o (1 ) clarif yth e NS R baselin e fo r determining whethe r a propose d physica l o r operationa l chang e wil l subjec t a utilit yt o th e preconstructio n revie wrequirement s o f thes e provisions ; (2 ) se t fort ha nactua l t o futur e actua l methodologyfo r determinin g whethe r a physica l
o r operationa l chang e i s subjec t t o NSR ; (3 ) provid e furthe r clarificatio n o f th e existing regulatoryrequiremen t tha t onl y thos e increase s i n emission s tha t actuall yresul t fro mth e physica l chang e o r chang e i n th e metho d o f operatio n ca n b e considere d i n determining whethe r th e propose d chang e subject s th e utilit yt o NS Rrequirements ; and (4 ) implemen t section s 4 0 9
an d 41 5 o f Titl e IV

o f th e Clea nAi r Ac t Amendment s o f 199 0 whic h

2 Fo r th e purpose s o f thi s notice , reference s t o "new sourc e review " (or "NSR" ) refe r t o th e preconstructio nrevie w requirement s o f bot hPar t C (PSD ) an d Par t D (nonattainment ) o f th e Clea n Ai r Act , unles s otherwis e indicated
.P. 8

- 6 - creat e specia l NSP S treatmen t fo r certai n repowering project s an d limite d NS Rexemption s fo r temporaryan d permanen t CC T projects , an d fo r certai n "ver yclean " units
. Finally , EPAi s als o proposing t o amen

d it s NSP S regulation s (4 0 CF RPar t 60 ) t o allo w a utilit yt o us e a s it s pre-chang e baselin e it s highes t hourl y emission s rat e achievabl e during th e 5 year s prio r t o th e propose d physica l o r operationa l change . T o th e exten t th e propose d amendment s implemen t existing EPApolicies , EPAwil l continu e t o administe r it s regulation s i n a manne r consisten t wit hthes e policie s pendin g adoptio no f th e regulation s propose d today . Today' s proposa l addressing pollutio n contro l project s and othe r non-routin e physica l an d operationa l change s a t electri c utilit yunit s i s timel yfo r severa l reasons . First , th e 199 0 Clea n Ai r Ac t amendment s establish , i n Titl e IV , a ne wcontro l scheme fo r addressing th e aci d rai nproblemwhic hfocuse s exclusivel yan

d immedia-telyo nutilit ypowe r plants . Titl e IV wil l forc e mos t electri c utilit ystea mgenerating unit s t o undertak e pollutio n contro l project s an d provide s ful l flexibilit yt o achiev e complianc e withou t a bia s toward s o r agains t an

yparticula r pollutio n contro l method . Second , th e Agenc ybelieve s it s extensiv e experienc e wit hothe r non-routin e physica l an

d operationa l change s a t suc hunit s an d th e uniqu e characteristic s o f th e electri c utilit yindustry(e.g. , th e genera l similarit yo f equipmen t withi nth e categoryan d th eP. 9

- 7 - exten t o f publicl yavailabl e information ) suppor t a revisio nt o th e ne wsourc e revie wapplicabilit ycriteri a fo r thi s sourc e category . Further , whil e Congres s di d no t mak e significan t change s i n th e NS Ran d NSP S statutorylanguag e i n1990 , th e conferenc e committe e provide d th e following guidanc e t o EPAi n it s Join t ExplanatoryStatement :

"[T]h e deletio n o f mos t provision s relatin g t o th e WEPC O decisio n i s no t intende d t o affec t o r prejudic e i n an ywayth e issue s o r resolutio n o f th e WEPC O matter . A t th e same time , th e conferee s urg e a quic k resolutio n o f th e WEPC O matte r b yEPAa s appropriate. " Conferenc e Comm. , Join t ExplanatoryStatemen t o f th e Committe e o f th e Conferenc e t o Accompan yS . 1630 , Rep . 101-952 , 101st . Cong. , 2n d Sess . (1990 ) pp . 344-45 . I n passing Titl e IV , Congres s di d
no t suspend an

yrequirement s o f titl e I . Howeve r Titl e I an d Titl e IV

ar e clearl yintende d t o wor k i nconcert , no t conflict , an d today' s ruling i s intende d t o ensur e tha t harmony . Portion s
o f th e preambl e o f today' s proposa l se t fort hEPA' s presen t policie s unde r it s curren t regulations , an d ma yb e relie d o na s
suc hpendin g fina l actio n o ntoday' s proposal . II . BACKGROUND A . Th e Ne wSourc e Performanc e Standards , Preventio no f Significan t Deterioratio nan d Nonattainmen t Program s o f Titl e I Titl e I o f th e Clea n Ai r Ac t ha s thre e program s specificall y designe d t o ensur e tha t n o ne wai r pollutio n—whethe r fro mne w source s o r frommodification s t o existing source s —ca nb e emitte d unles s th e sourc e complie s wit hne wsourc e requirements
.P.1 0

- 8 - Th e 197 0 Clean Ai r Ac t require d EPAt o promulgat e technology-base d ne wsourc e performanc e standard s applicabl e t o th e constructio n o r modificatio no f stationarysource s tha t caus e o r contribut e significantl yt o ai r pollutionwhic hma yreasonabl y b e anticipate d t o endange r publi c healt ho r welfare . Clea nAi r Ac t ("CAA" ) § 111(b)(1)(A) , 4 2 U.S.C . 7411(b)(1)(A) . Th e NSP S provision s wer e "designe d t o preven t ne wai r pollutio nproblems " b yregulatin g newly-constructe d source s and change s occurring a t existing source s tha t resul t i n emission s increases
. Se e Nationa l Asphal t Pavemen t Assoc , v . Train
. 53 9 F.2 d 775 , 78 3 (D.C . Cir
. 1976) ; se e als o H.R . Rep . No . 1146 , 91s t Cong. , 2d Sess . 3 , reprinte d i n 197 0 U.S . Cod e Cong . & Admin
. New s 5356 , 5358 . Congres s define d th e term"modification " a s "an yphysica l chang e in , o r chang e i n th e metho d o f operatio nof , a stationary sourc e whic hincrease s th e amoun t o f an yai r pollutan t emitte d b y suc hsourc e o r whic hresult s i n th e emissio no f an yai r pollutan t
no t previousl yemitted. " Se e CA A§ 111(a)(4) , 4 2 U.S.C . 7411(a)(4) . I n 1977 , Congres s adopte d additiona l amendment s t o th e Clea n Ai r Act . Thes e change s include d preconstructio n permittin g requirement s fo r majo r ne wan d modifie d source s unde r tw o programs , preventio n o f significan t deterioratio n (PSD ) an d nonattainmen t newsourc e revie w(respectively , Part s C an d D o f th e Clea n Ai r Act) . Congres s intende d thes e program s t o appl y generall ywher e industria l change s migh t increas e pollutio ni n a nP.1 1

- 9 - area . Alabama Powe r Co . v . Costle . 63 6 F.2 d 323 , 40 0 (D.C . Cir
. 1979) . Congres s incorporate d i nPart s C and D th e sam e definitio n o f th e ter m"modification " se t fort hi nth e NSP S provisions
. Se e CA A§ 111(a)(4) , 169(2)(C) , an d 171(4) . Th e NS Rprogramfo r PS D (CA A§ § 160-169 ) applie s i n attainmen t areas , i.e. , thos e area s whic hhav e attaine d th e nationa l ambien t ai r qualit ystandard s (NAAQS) . T o receiv e a PS D permit , a prospectiv e majo r ne wsourc e o r majo r modificatio n mus t (amon g othe r things ) showtha t (1 ) i t wil l no t caus e o r contribut e t o a violatio no f th e availabl e ai r qualit y "increment " (designed t o preven t ambien t ai r qualit yfrom deterioratin g b

ymor e tha n certai nspecifie d levels) , (2 ) i t wil l
no t caus e o r contribut e t o a violatio no f a NAAQS , and (3 ) i t wil l us e th e "bes t availabl e contro l technology(BACT), " whic h
mus t b e a t leas t a s stringen t a s an yapplicabl e NSP S o r hazardou s pollutan t standar d unde r sectio n11 2 o f th e Act . Par t D o f th e 197 7 Amendment s applie s t o nonattainmen t
areas , i.e. , thos e area s whic hhav e no t me t th e NAAQ S unde r sectio n 109 . T o receiv e a permi t i n suc hareas , majo r ne wan d modifie d source s mus t (amon g othe r things ) (1 ) obtai nemission s offsets , thereb

yassuring tha t reasonabl e progres s towar dP.1 2

- 1 0 - attainmen t o f th e NAAQ S wil l occur , an d (2 ) compl ywit hth e "lowes t achievabl e emissio nrat e (LAER). " Se e CA A§ 171-173. 3 B . Th e Two-Ste p Tes t fo r Modification s Th e modificatio n provision s o f th e NSP S and NS Rprogram s ar e base d o n th e broa d NSP S definitio n o f "modification " i nsectio n 111(a)(4 ) o f th e Act . Tha t sectio n contemplate s a two-ste p tes t fo r determinin g whethe r activitie s a t a n existin g facilit y constitut e a modificatio nsubjec t t o ne wsourc e requirements
. I n th e firs t step , whic hi s largel yth e same fo r NSP S an d NSR , th e reviewing authorit ydetermine s whethe r a physica l o r operationa l chang e wil l occur. 4 I f so , th e reviewing authorit yproceed s i n th e second step t o determin e whethe r th e physica l o r operationa l chang e wil l resul t i n an emission s increas e ove r baselin e levels . I n thi s second step , th e applicabl e rule s branc hapart , reflecting th e fundamenta l distinction s betwee nth e technology

base d provision s o f NSP S an d th e ai r quality-base d provision s o f NSR .

Th e 197 0 Clean Ai r Ac t als o include d a provisio n applicabl e t o constructio n o r modificatio no f an ystationary source . Thi s provisio n i s presentl yse t fort hi nsectio n 110(a)(2)(C) . Today' s notic e doe s no t propos e t o chang e th e scop e o f th e regulation s implementing thi s provision
. Se e 4 0 CF R 51.160-164 .

Thi s i s furthe r describe d i n sectio nIII. H below .P.1 3

- 1 1 " Briefly , th e NSP S programexamine s maximu m hourl yemission s rates , expresse d i n kilogram s pe r hour. 5 Emission s increase s fo r NSP S purpose s ar e determine d b ychange s i nth e hourl y emission s rate s a t maximu mphysica l capacity
. O nth e othe r hand , th e NS Rregulation s examin e tota l emission s t o th e atmosphere . Fo r applicabilit ydeterminatio npurposes , emission s increase s unde r NS Rar e determine d b ychange s i nannua l emission s a s expresse d i n ton s pe r yea r (tpy). 6 C . Ste p One : Physica l o r Operationa l Chang e Th e EPAha s alway s recognize d tha t th e definitio n o f physica l o r operationa l chang e i n sectio n 111(a)(4 ) could , standing alone , encompas s th e mos t mundan e activitie s a t a n industria l facilit y(even th e repai r o r replacemen t o f a singl e leak ypipe , o r a chang e i nth e waytha t pip e i s utilized)
. However , EPAha s alway s recognize d tha t Congres s obviousl ydi d

An hourl yemission s rat e mayb e determine d b ya stac k tes t o r calculate d fromth e produc t o f th e instantaneou s emission s rate , i.e. , th e amoun t o f pollutio nemitte d b ya source , afte r control , pe r uni t o f fue l combuste d o r materia l processe d (sucha s pound s o f sulfu r dioxid e emitte d pe r to n o f coa l burned ) time s th e productio nrat e (sucha s ton s o f coa l burne d pe r hour) . Se e sectio n 60.14 .

6 Annua l emission s mayb e calculate d a s th e produc t o f th e hourl yemission s rat e time s th e utilizatio n rate , expresse d a s hour s o f operatio n pe r year , o r a s th e produc t o f a nemission s facto r (e.g. , fromCompilatio no f Ai r Pollutan t Emissio n Factors . AP-42 , 4t hEd . an

d subsequen t supplements ) i n unit s o f mas s emitte d pe r uni t o f proces s throughpu t time s th e annua l throughput . Se e 4 0 CF R52.21(b)(21) .P.1 4

- 1 2 - no t inten

d t o mak e everyactivit ya t a sourc e subjec t t o ne w sourc e requirements
. A s a result , EPAha s define d "modification " i nth e NSP S an d NS Rregulation s t o includ e common-sens e exclusion s fromth e "physica l o r operationa l change " componen t o f th e definition
. Fo r example , bot hset s o f regulation s contai nsimila r exclusion s fo r routin e maintenance , repair , an d replacement ; fo r increase s i n th e hour s o f operatio no r i n th e productio n rate ; and fo r certai n type s o f fue l switches
. Se e e.g. , 52.21(b)(2)(iii ) an d 60.14(e) . I n addition , wit hrespec t t o pollutio n contro l equipment , th e NSP S regulation s contai na nexclusio nfor :

Th e additio n o r us e o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio no f ai r pollutants , excep t whe na n emission s contro l systemi s remove d o r i s replace d b ya system whic hth e Administrato r determine s t o b e les s environmentall ybeneficial
. 4 0 CF R60.14(e)(5) . A s wil l b e discussed , i nrecen t individua l applicabilit ydetermination s EPAha s exclude d pollutio ncontro l project s fromNS Rfollowing a simila r "environmentall y beneficial " test . D . Ste p Two : Emission s Increase s fo r NSP S Applicabilit y Th e EPA' s NSP S regulation s defin e th e ter m"modification " a s
an y"physica l o r operationa l chang e t o an existing facilit ywhic h result s i n an increas e i n th e emissio nrat e t o th e atmospher e o f
an ypollutan t t o whic ha standard applies. " Se e 4 0 CF R60. 2 an d 60.14 . Unde r curren t NSP S regulations , emission s increases , fo r applicabilit ypurposes , ar e calculate d b ycomparing th e hourl yP.1 5

- 1 3 - emissio n rate , a t maximu mphysica l capacity , befor e an d afte r th e physica l o r operationa l change . Tha t is , t o determin e whethe r a chang e t o a n existin g facilit ywil l increas e th e emission s rate , th e existing NSP S regulation s authoriz e th e us e o f a n"emission s facto r analysis, " o r a material s balance , continuou s monitoring , o r manua l emission s tes t t o evaluat e emission s befor e an d afte r th e change . 4 0 CF R60.14(b)(2) . Absen t th e exclusion s fro mmodification s specifie d a t 4 0 CF R 60.14(e) , an

yincreas e i n emission s t o th e atmospher e ove r th e previou s emission s rat e wil l subjec t th e uni t t o NSPS . Se e 4 0 CFR60.14(a ) an

d (b) . I naddition , unde r th e "reconstructio n rules, " physica l o r operationa l change s whic hwoul d cos t 5 0 percen t o r mor e o f th e tota l cos t o f a comparabl e ne wfacilit y-- - mayb e classifie d a s reconstruction s (se e 4 0 CF R60.15 ) and ar e subjec t t o NSP S a s a ne wsource , eve ni f ther e i s n o emission s increase
. E . Ste p Two : Emission s Increase s Unde r NS RRequirement s 1 . Existing Regulation s Th e EPA' s regulation s implementing th e PS D an d nonattainmen t program s requir e preconstructio nrevie wfo r source s undertaking a "majo r modification, " i.e. , a physica l chang e o r chang e i n th e metho d o f operation s "tha t woul d resul t i n a significan t ne t emission s increas e o f an ypollutan t subjec t t o regulatio n unde r th e Act. " 4 0 CFR52.21(b)(2)(i ) an d (3)(i) ;P.1 6

- 1 4 - 52.24(f)(5). 7 A"ne t emission s increase " i s define d a s th e increas e i n "actua l emissions " from th e particula r physica l o r operationa l chang e togethe r wit han yothe r "contemporaneous " increase s o r decrease s i nactua l emissions
. 4 0 CF R 52.21(b)(3)(i). 8 Applicabilit yo f th e Act' s ne wsourc e revie wprovision s mus t b e determine d i n advanc e o f constructio n an d i s pollutan t specific
. I n case s involving existing sources , thi s require s a pollutant-by-pollutan t projectio n o f th e emission s increases , i f any , tha t wil l resul t fro mth e physica l o r operationa l change . Specifically , t o determin e whethe r a propose d physica l o r

Th e curren t PS D programi s se t fort hi n tw o set s o f regulations
. On e o f th e regulation s cited'(4 0 CF R52.21 ) i s par t o f th e federa l PS D permi t programwhic happlie s a s par t o f a Federa l implementatio n pla n fo r State s tha t hav e no t submitte d a PS D programmeetin g th e regulatoryrequirement s o f 4 0 CF R51.16 6 (standard s fo r PS D provision s i nStat e implementatio nplans) . I n mos t State s wher e th e federa l requirement s apply , EPAha s delegate d th e authorit yt o implemen t th e PS D programbac k t o th e State . Roughl ytwo-third s o f th e State s ar e implementing thei r ow n PS D programpursuan t t o a n EPA-approve d stat e implementatio n plan . Section s 52.2 1 an d 51.16 6 hav e identica l modificatio n provisions
. EPA' s regulation s fo r nonattainmen t area s ar e se t fort ha t 4 0 CFR§ 51.165 , 52.2 4 an d i n Par t 51 , Appendi xS . Thes e section s contai n applicabilit yprovision s regarding modificatio n tha t ar e largel yidentica l t o thos e i n th e PS D provisions
.

8 Roughl yspeaking , "contemporaneous " emission s increase s o r decrease s ar e thos e whic hhav e occurre d betwee nth e dat e five year s precedin g th e propose d physica l o r operationa l chang e an d th e dat e tha t th e increas e fro mth e chang e occurs . 4 0 CFR 52.21(b)(3)(ii)
. Onc e a modificatio ni s determine d t o b e major , th e PS D requirement s appl yonl yt o thos e specifi c pollutant s fo r whic hther e woul d b e a significan t ne t emission s increase
. E.g. , 4 0 CFR52.21(j)(3 ) (bes t availabl e contro l technology) ; 4 0 CFR 52.21(m)(l)(b ) (ai r qualit yanalysis)
.P.1 7

- 1 5 - operationa l chang e wil l resul t i n an emission s increase , th e sourc e mus t firs t determin e a baselin e leve l o f actua l emissions
. Th e regulation s defin e actua l emission s o na particula r dat e a s "th e averag e rate , i n ton s pe r year , a t whic hth e uni t actuall y emitte d th e pollutan t durin g a 2-yea r perio d whic hprecede s th e particula r dat e an d whic hi s representativ e o f norma l sourc e operation. " Th e Administrato r "shall " allo wus e o f a differen t tim e perio d "upo n a determinatio n tha t i t i s mor e representativ e o f norma l sourc e operation. " Id . Th e EPAha s typicall yuse d th e 2 year s immediatel yprecedin g th e physica l o r operationa l chang e t o establis hth e baseline
. Se e 4 5 Fed . Reg . 52676 , 52705 , 5271 8 (1980) . However , i t ca n allo wth e us e o f a n earlie r 2-yea r perio d tha t i s mor e representativ e o f norma l sourc e operations
. Fo r example , i n WEPCO , EPAfoun d th e fourt han

d fift hyear s prio r t o th e modificatio n mor e representativ e o f WEPCO' s norma l operations
. .

Becaus e th e applicabilit ydeterminatio n mus t b e mad e i n advanc e o f construction , EPA' s NS Rregulation s provid e tha t whe n
a n emission s uni t "ha s no t begunnorma l operations, " actua l emission s equa l th e "potentia l t o emi t o f th e unit. " 4 0 CF R 52.21(b)(21)(iv)
. Thi s approac hi s referre d t o a s th e actua l t o potentia l methodology . Thi s regulatoryprovisio nmayb e overcom e

—an d ne wsourc e revie wwil l no t appl y —i f th e sourc e owne r agrees , i n a federall yenforceabl e instrumen t —no t t o increas eP.1 8

- 1 6 - it s actua l emission s abov e baselin e levels . Se e e.g. f 4 0 CF R 52.21(b)(4) .

2 . Th e WEPC O an

d Puert o Rica nCemen t Decision s A s note d above , t o calculat e whethe r a physica l o r operationa l chang e "increases " emissions , EPAregulation s requir e i t t o fin

d a n increas e i n actua l emissions
. 4 0 CF R 52.21(b)(3)(i)(a)
. Wher e th e emission s uni t ha s no t "begun norma l operations, " EPAregulation s recogniz e tha t futur e actua l emission s ar e difficul t t o predic t an d emplo yfutur e "potential " emission s a s a proxy . 4 0 CF R52.21(b)(21)(iv)
. Th e linchpi n unde r th e curren t regulation s fo r predictin g futur e emission s afte r a modificatio n i s thu s whethe r th e uni t ha s "begun norma l operations. "

Tw o recen t federa l appellat e cour t decision s hav e addresse d EPA' s interpretatio no f th e phras e "begun norma l operations. " Thes e decisions , Puert o Rica n Cemen t Co. , Inc . v . U S EPA , 88 9 F.2 d 29 2 (1s t Cir
. 1989 ) an d Wisconsi n Elec . Powe r Co . v . Reillv
. 89 3 F.2 d 90 1 (7thcir
. 1990 ) ("WEPCO") . occasio na reexaminatio n o f EPA' s interpretatio n o f th e phrase , and o f th e usefulnes s o f th e regulatorylanguag e itself
. Th e meanin g o f th e phras e i s highl yfact-dependent , an d thes e decision s hav e create d uncertaint yregarding it s application ; thus , a s describe d late r i n thi s notice , EPAtodaypropose s t o chang e it s regulation s fo r electri c utilit ystea mgenerating unit s t o employmor e usefu l criterion
../ •

- 1 7 - Bot hcase s involve d physica l change s t o existin g emission s units , bu t change s o f differin g extent , natur e an d result . I n Puert o Rica n Cement , th e owne r o f a cemen t plant 9 wit hsevera l kiln s sough t t o conver t on e "wet " kil nint o a "dry " kiln , an

d t o combin e tha t kil n wit hanothe r kiln
. 88 9 F.2 d a t 293 . Th e cour t observe d tha t th e tota l productio ncapacit yo f th e renovate d singl e kil n woul d excee d th e combine d productio n capacit yo f th e previou s tw o separat e kiln s b y"abou t 35%. " Id . I t note d tha t th e renovate d singl e kil nwoul d emplo ya differen t "cement-making process " tha t th e origina l kil n fromwhic hi t wa s "converted, " id
. An d i t sai d tha t th e ne wkil nwoul d b e "mor e efficien t [and ] maylead th e fir mt o decid e t o increas e th e leve l of-production. " id
. a t 29 7 (emphasi s i noriginal)
. I nreviewin g EPA' s interpretatio n o f "begunnorma l operations, " th e cour t applie d a highl ydeferentia l standar d o f review , sinc e a n agency' s interpretatio n o f it s ow nregulatorylanguag e i s typicall ygive n "'controlling weigh t unles s i t i s plainl y erroneou s o r inconsisten t wit hth e regulation.' " 88 9 F.2 d a t 297 , quotin g Udal l v . Tallman . 38 0 U.S . 1 , 16-1 7 (1965 ) (citatio n omitted)
. Th e cour t conclude d tha t o n th e fact s o f th e case , EPA' s interpretatio n tha t "norma l operations " ha d no t begu n wa s no t "arbitraryo r irrational, " id
. a t 298 , and henc e EPA' s

9 Puert o Rica n Cemen t involve d a cemen t plant , no t an electri c utility , bu t th e court' s lega l analysi s o f th e phras e "begun norma l operations " i nth e curren t regulation s i s relevan t t o al l facilities
.P.2 0

- 1 8 - applicatio n o f th e actual-to-potentia l tes t t o predic t futur e emission s wa s permissible
.

I n WEPCO . 89 3 F.2 d 901 , th e Sevent hCircui t wa s face d wit ha differen t kind o f modification
. Ther e renovation s wer e propose d fo r severa l olde r (3 5 t o 5 0 yea r old ) coal-fire d electri c utilit yboilers
. Th e physica l change s involve d repai r an d replacemen t o f turbine-generators , steam drum s an

d othe r majo r components . Th e EPAcontended , a s i t ha d i nPuert o Rica n Cement , tha t thes e change s wen t beyond "norma l operations " an d thu s warrante d us e o f futur e potentia l emission s a s th e tes t fo r an emission s increas e ove r pas t actua l emissions
. Her e th e cour t disagree d wit hEPA' s interpretatio ntha t "norma l operations " ha d
no t begun . Th e cour t coine d th e phras e "like-kind replacement " t o describ e th e typ e o f renovatio n occurrin g a t th e WEPC o plant . Id . a t 917 . Th e cour t describe d a "like-kind replacement " a s on e tha t "doe s no t 'chang e o r alter ' th e desig n o r natur e o f th e facility
. Rather , i t merel yallow s th e facilit yt o operat e agai n a s i t ha d befor e th e specifi c equipmen t deteriorated. " Id . a t 908 . I n determinin g whethe r suc ha "like-kind replacement " ha d "begu n norma l operations, " id
. a t 917 , th e cour t considere d whethe r a "realisti c assessmen t o f [the ] impac t [o f th e change ]
o n ambien t ai r qualit ylevel s i s possible.' " J_d . a t 91 7 (quoting Alabama Powe r Co . v . Costle . 63 6 F.2 d 323 , 37 9 (D.C . Cir
. 1979) . Th e cour t sai d tha t wher e th e renovation s wer e "like-kind replacements, " EPAcoul d no t reasonabl yinterpre t it s regulation s- 1 9 -

t o saytha t suc ha uni t wa s s o differen t tha t i t ha s no t "begun norma l operations. " Thus , i t conclude d tha t th e "actual-to

potential " tes t coul d no t b e applied , unde r EPA' s regulations , t o unit s simpl yundergoing "like-kind replacements." 1 0

Neithe r o f thes e decision s specifie d th e threshol d fo r whe n a uni t ha s "begun norma l operations. " Base d o n thes e decisions , unde r it s curren t regulations , EP Amus t conside r th e fact s o f eac hcas e an d appl yth e actual-to-potentia l tes t onl y wher e th e chang e i s sufficientl ysignifican t t o suppor t a finding tha t "norma l operations " hav e no t "begun. " A t leas t fo r change s tha t ar e "lik e kin d replacements, " "norma l operations " hav e begun , and th e actual-to-potentia l tes t i s impermissible
.

Becaus e th e "begun norma l operations " criterio ni s highl yfact-dependen t an d it s applicatio ni s inherentl ycase-by

case , i t ma yb e a n uncertai nindicato r o f wha t emission s tes t wil l b e applie d i n a give ninstance
. However , EPA' s extensiv e experienc e wit helectri c utilities , an d th e generall ysimila r natur e o f operation s withi n thi s sourc e category , provid e EPAa n adequat e basi s o n whic ht o predic t futur e actua l emission s from
suc hunit s i n mos t cases . Consequently , a s explaine d below , EPA i s todayproposin g t o revis e it s regulation s t o appl yth e actual

to-actua l tes t o n al l physica l o r operationa l change s a t electri c

1 0 O n remand , EPAemploye d a nactual-to-futur e actua l test , comparin g WEPCo' s representativ e actua l emission s fo r th e baselin e perio d t o estimate d futur e actua l emission s base d o nal l th e availabl e fact s i n th e record .- 2 0 -

utilit ystea

m generating unit s sav e thos e tha t ar e an additio no f
a ne wuni t o r constitut e a replacemen t o f an existing units. 1 1 Pending fina l adoptio n o f thi s ne wrule , EPAwil l continu e t o appl ya n actual-to-actua l tes t t o unit s tha t undertak e "like-kind replacements " an

d othe r unit s whic har e foun d t o hav e "begun norma l operations. " F . Th e Clea n Ai r Ac t Amendment s o f 199 0 1 . Ne wSourc e Revie wan d th e Aci d Rai nProvision s Th e Clea n Ai r Ac t Amendment s o f 199 0 mad e numerou s change s i n th e nonattainmen t provision s o f th e Clea nAi r Ac t an d adde d n newtitl e t o addres s th e problemo f aci d rain
. Th e amendment s attac k nonattainmen t problem s wit ha broa d arrayo f ne w requirement s al l designe d t o bring al l area s o f th e countryint o attainmen t wit hth e nationa l ambien t ai r qualit ystandard s fo r al l pollutants . Thes e requirement s includ e traffi c reductio n strategies , us e o f alternativ e clean fuels , increase d offse t requirement s fo r stationarysources , an d change s i nth e threshol d siz e o f stationarysource s subjec t t o ne wsourc e review
. A principa l them e o f th e legislatio n i s th e establishmen t o f categorie s o f nonattainmen t area s base d o n th e severit yo f th e pollutio n problem . Th e mor e sever e th e area , th e mor e control s Congres s require d b e imposed
.

1 1 A s a n illustration , had thi s ne wtes t governe d th e fact s i n WEPC o o r th e fact s i nPuert o Rica nCemen t (wher e i t an electri c unity) , EPAwoul d hav e applie d th e actual-to-actua l test .P.2 3

- 2 1 - Th e Amendment s als o establish , i nTitl e IV , a ne wcontro l schem e fo r addressing th e aci d rai nproblem . Th e exclusiv e focu s o f thi s programi s o n utilit ypowe r plan t emission s o f sulfu r dioxid e and nitroge n oxides
. Th e 199 0 Amendment s requir e sulfu r dioxid e emission s fro m utilitie s t o b e reduce d b yapproximatel y 1 0 millio n ton s annuall yi n tw o phase s —th e firs t t o tak e effec t i n 1995 , th e second i n 2000 . Atota l o f 11 1 specifi c plant s ar e targete d i n Phas e I , and , wil l b e require d t o reduc e thei r S0 2 emission s t o specifie d emission s limits
. I nPhas e II , thes e plants , an

d almos t al l others , ar e subjec t t o eve n lowe r S0 2 emission s limits
. Thi s reductio nprogram i s t o b e implemente d througha ne wmarket-base d syste munde r whic h emission s allowance s reflecting th e require d reductio n i n curren t emission s ar e allocate d t o existing utilit yplants . Plan t
owners , wh o ar e require d t o hol d allowance s equa l t o thei r actua l emissions , ar e the n fre e t o trad e thes e allowances . Thus , th e emission s o f individua l unit s mayvaryfrom th e initia l allocatio n o f allowances , bu t aggregat e emission s ar e alway s hel d t o th e program' s cveral l targe t level . Thi s programwil l provid e powerfu l incentive s t o source s t o undertak e pollutio ncontro l projects
. Becaus e o f thes e requirements , man yo f th e plant s subjec t t o Phas e I control s mus t mak e complianc e decision s withi nth e nex t yea r i n orde r t o assur e tha t th e complicate d contro l equipmen tP.2 4

- 2 2 - tha t mayb e necessaryt o mee t Phas e I standard s i s i nplac e b y th e 199 5 deadline
.

2 . Repowering an

d CC T Project s I n Titl e IV

o f th e 199 0 Amendments , whic hcreate s th e aci d rai n program , Congres s mad e change s i n th e applicabilit yo f ne w sourc e requirement s t o change s involving repowering an d CC T projects
. Sectio n 40 9 grant s a nextensio no f th e aci d rai ncontrol s deadlin e t o source s tha t see k t o compl ywit hth e aci d rai n reduction s b

yrepowering a uni t wit hqualifyin g clea ncoa l technology . Sectio n 402(12 ) define s repowerin g as :

[The ] replacemen t o f a n existing coal-fire d boile r wit hon e o f th e following clea ncoa l technologies:atmospheri c o r pressurize d ~ ~ fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnethohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d byth e Administrator , i n consultatio nwit hth e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technologycapabl e o f controlling multipl e combustio n emission s simultaneousl ywit h improve d boile r o r generatio nefficienc yan d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi n widesprea d commercia l us e a s o f th e dat e o f enactmen t o f th e Clean Ai r Ac t Amendment s o f 1990 . Notwithstanding th e provision s o f §409(a) , fo r th e purpos e o f thi s title , th e term'repowering ' shal l als o includ e an yoi l and/o r gas-fire d uni t whic hha s bee nawarde d clea n coa l technologydemonstratio n funding a s o f January1 , 1991 , b yth e Departmen t o f Energy . Se e CAA , § § 402(12 ) an d 409(a) .P.2 5

- 2 3 - Congres s provide d tha t repowering project s tha t qualif yfo r
a Phas e I I complianc e extensio n woul d als o b e exemp t fromNSP S requirements , s o long a s th e repowering "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r th e Act. " Se e CAA , § 409(d) . An operato r ca nqualif yfo r th e 3-yea r extensio n o f th e Phas e I I emission s limitatio n b ydemonstratin g (b y Decembe r 31 , 1997 ) t o th e permittin g authorit ytha t on e o r mor e unit s wil l b e repowere d wit ha qualifying clea ncoa l technology t o mee t th e Titl e IV restrictions
. Th e operato r mus t provide , n o late r tha n January1 , 2 000 , additiona l documentatio no f th e repowering projec t including a preliminarydesig nan d engineering effor t fo r th e projec t and a binding contrac t fo r th e majorit yo f th e equipmen t needed , a s wel l a s an yadditiona l informatio nth e reviewing authorit yrequires
. Today' s proposa l als o implement s anexemptio nfromne w sourc e requirement s fo r CC T demonstratio nproject s create d b y Congres s i n sectio n 41 5 o f Titl e IV o f th e 199 0 Amendments . I n thes e provisions , CC T i s define d a s an ytechnologyno t i n widesprea d us e o n th e dat e o f enactmen t tha t achieve s significan t reduction s i n S0 2 o r nitroge noxide s (N0 x ) emission s associate d wit hburnin g coa l i n th e generatio no f electricity , proces s steam , o r industria l products . Se e § 415(a) . ACC TP.2 6

- 2 4 - "demonstratio n project " i s a projec t funde d unde r DOE' s CC T programo r a simila r projec t funde d b yEPA. 1 2 Repowering project s tha t ar e awarde d funding fromth e Departmen t o f Energ y(DOE ) a s permanen t CC T demonstratio n project s (or simila r project s funde d b yEPA ) ar e exemp t fro mNSP S
an d PS D requirement s s o long a s potentia l emission s (se e 52.21(b)(4) ) fro

mth e uni t d o no t increas e a s a resul t o f th e project
. Id . § 415(b) . Thes e funde d project s maystil l b e require d t o compl ywit hth e nonattainmen t NS Rprovision s o f Titl e I o f th e Act , unles s the yar e exclude d a s pollutio ncontro l projects
. Th e installation , operation , cessation , o r remova l o f a temporaryCC T demonstratio nprojec t that"i s operate d fo r 5 year s o r les s i s exemp t fro m NSP S an

d bot hPS D an

d nonattainmen t ne w sourc e requirements
. Se e § 415(b)(2) . However , th e facilit y stil l mus t compl ywit hth e applicabl e SI P an d othe r requirement s necessaryt o attai n an d maintai n th e NAAQS . Finally , i n sectio n 415(c) , Congres s provide d an exemptio n fro mNSP S and PS D fo r th e reactivatio no f "veryclea n units " otherwis e i n complianc e wit hth e Ac t tha t ha d bee n shu t downfo r

1 2 Sectio n 415(b)(1 ) define s a CC T projec t a s a a projec t "using fund s appropriate d unde r th e heading 'Departmen t o f Energy-Clea n Coa l Technology' , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea ncoa l technology , o r simila r project s funde d throughappropriation s fo r th e EPA. "P.2 7

- 2 5 - a t leas t th e 2 year s prio r t o enactmen t o f th e 199 0 Amendment s
an d that , prio r t o th e shutdown , ha d bee nequippe d wit hpollutio n control s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r sulfu r dioxid e an

d 9 8 percen t fo r particulates , an d ha d bee n equippe d wit hlow-NOxburners . III . DISCUSSION A . Pollutio n Contro l Project s 1 . Propose d RegulatoryChange s fo r Pollutio nContro l Project s Th e EPApropose s t o amend it s PS D an d nonattainmen t regulation s a s the ypertai nt o utilit ypollutio n contro l project s b yexercisin g it s authorit yunde r th e statutorydefinitio no f "modification " an

d confirming th e Agency' s curren t polic ytha t
suc hproject s ar e no t subjec t t o NS Runles s the yrende r th e uni t les s environmentall ybeneficial
. Generally , pollutio ncontro l project s a t existing stationarysource s ar e no t majo r modification s subjec t t o ne wsourc e revie wrequirement s fo r th e simpl e reaso n tha t theyd o no t resul t i na nincreas e i n actua l emissions
. I n addition , EPAha s alway s recognize d tha t Congres s di d no t intend tha t everyactivit ya t a n existin g facilit yb e considere d a physica l o r operationa l chang e fo r purpose s o f th e ne wsourc e review. 1 3

1 3 Fo r instance , EPAha s specificall yrecognize d tha t routin e maintenance , repai r an d replacement , an

d change s i n hour s o f operatio n o r i n th e productio n rat e ar e no t considere d a physica l chang e o r chang e i nth e metho d o f operation
. Se e 4 0 CF R 52.21(b)(2)(iii) , 52.24(f)(5)(iii)
.P.2 8

- 2 6 - T o addres s thi s concern , EPAi s todayproposing t o adop t revision s t o it s PS D an d nonattainmen t regulation s fo r th e addition , replacemen t o r us e a t a nexisting electri c utilit y stea mgeneratin g uni t o f an ysystemo r devic e whos e primary functio n i s th e reductio n o f ai r pollutant s (including th e switching t o a less-polluting fue l wher e th e primarypurpos e o f th e switc hi s th e reductio no f ai r pollutants) . Unde r today' s proposal , a utilit ypollutio ncontro l projec t wil l no t b e treate d
a s a physica l o r operationa l chang e unles s th e projec t render s th e uni t les s environmentall ybeneficial
. A s indicate d above , th e keyt o thi s additio n t o th e lis t o f exclusion s fromth e ter mphysica l o r operationa l chang e i s EPA' s judgmen t tha t Congres s di d no t inten d tha t pollutio n contro l project s b e considere d th e typ e o f activit ytha t shoul d trigge r NSR . Th e EPAi s todayissuing regulatorylanguag e t o explicat e an d formaliz e it s statutoryauthorit yt o exclud e pollutio n contro l project s unde r th e NS Rprovisions
. I n1977 , whe n Congres s enacte d th e NS Rprovision s o f th e Act , i t provide d tha t th e ter m"modification " i n NS Rshal l hav e th e same meanin g a s th e ter m"modification " unde r NSPS . Se e §§ . 169(2)(c) , 171(4) . A t th e time , regulation s promulgate d unde r th e NSP S provision s defining "modification, " § 111 , provide d tha t th e ter m "modification " doe s no t include :

Th e additio n o r us e o f an ysystemo r devic e whos e primaryfunctio n i s th e reductio no f ai r pollutants , excep t whe na nemission s contro l systemi s remove d o r i s replace d b ya- 2 7 - systemwhic hth e Administrato r determine s t o b e les s environmentall ybeneficial
. 4 0 CF R60.14(e)(5) . I n 1978 , EPAnote d tha t "i n addin g sectio n 169(2)(c ) t o th e Act , Congres s indicate d tha t i t intende d t o conformth e meanin g o f 'modification ' t o 'usag e i n othe r part s o f th e Act. ' 12 3 Congr . Rec . H11955 , 1195 7 (Nov . 1 , 1977). " 4 3 Fed . Reg . 2639 6 (June 19 , 1978) . Thus , jus t a s EPAha d th e statutoryauthorit yt o exclud e pollutio n contro l project s b y regulatio n fromNSPS , th e statutoryauthorit yexist s fo r EPAt o explicat e b

yregulatio n a nexclusio nfo r pollutio ncontro l project s fromPart s C an d D o f Titl e I . A s discusse d i n greate r detai l i n a subsequen t section , thi s exclusio n unde r NS Rreflect s th e existing regulatoryexclusio n fo r pollutio n contro l activitie s unde r NSP S regulations , an d
severa l recen t case-specifi c nonapplicabilit ydetermination s unde r th e ne wsourc e revie wprograms . Th e NSP S regulatory exclusio n contain s th e provis o tha t th e replacemen t o f a pollutio n contro l system o r devic e canno t b e les s "environmentall ybeneficial " t o qualif yfo r th e exclusion
. Se e 4 0 CFR60.15(e)(5) . Wit hrespec t t o ne wsourc e review , today' s proposa l adopt s a simila r regulatoryexclusio nfo r pollutio n contro l project s i n th e PS D an d nonattainmen t context . Th e majo r differenc e i n th e propose d NS Rexclusio ni s tha t i t woul d appl y th e "no t les s environmentall ybeneficial " tes t t o th e additio n
an d use , a s wel l a s th e replacement , o f a pollutio n contro l systemo r device
. Thi s chang e reflect s th e distinc t ai r qualit yP.3 0

- 2 8 - componen t o f th e PS D an d nonattainmen t programs . B yfocusing o n whethe r a pollutio n contro l projec t i s a physica l o r operationa l chang e withi n th e meaning o f th e ne wsourc e revie wregulations , today' s ruling avoid s th e nee d t o undertak e a quantitativ e emission s increas e calculatio ni neverycase , a s woul d b e necessaryi f suc hproject s wer e deeme d t o b e physica l o r operationa l changes . Th e EPAexpect s tha t most , i f no t all , pollutio n contro l project s wil l reduc e ne t actua l emissions
. Nevertheless , th e Administrator' s authorit yt o conside r individua l pollutio n contro l project s provide s a n adequat e opportunit yt o determin e tha t a pollutio ncontro l projec t woul d somehowresul t i n an advers e environmenta l impac t an d thu s conclud e tha t th e projec t render s th e uni t les s environmentall y beneficial , and i s therefor e a physica l o r operationa l chang e tha t mayb e subjec t t o NSR . Fo r th e purpose s o f thi s proposal , a pollutio n contro l projec t refer s t o a projec t undertake n a t a utilit yuni t fo r purpose s o f reducing emission s fro msuc hunit
. Thes e change s ar e limite d t o th e installatio no f conventiona l o r innovativ e emission s contro l equipment , including , bu t no t limite d to , installatio n o f conventiona l an d advance d flu e ga s desulfurization , sorben t injectio n fo r S0 2 an d NO xcontrols , electrostati c precipitators , an d project s undertake n t o accommodat e switching t o a les s polluting fuel , including natura l- 2 9 -

ga s o r coa l re-burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling S0 2 an d NO xemissions
. Likewise , an

yactivit ytha t i s necessaryt o accommodat e switching t o a les s pollutin g fue l i s considere d t o b e par t o f th e pollutio n contro l project
. I n som e instances , thi s may involv e change s t o th e pollutio n generatin g equipmen t (e.g. . boiler) , bu t onl yi f th e change s ar e necessaryt o maintai nth e norma l operatin g capabilit yo f th e uni t a t th e tim e o f th e project , wher e th e capabilit ywoul d otherwis e b e impaire d a s a resul t o f th e fue l switch
. Fo r example , a nelectri c utilit y stea mgeneratin g uni t tha t switche s fro ma highe r sulfu r bituminou s coa l t o a low-sulfu r subbituminou s coa l maynee d t o mak e certai n change s t o th e boile r i n orde r t o avoi d deratin g th e unit
. Change s tha t ar e intende d primaril yt o restor e origina l capacit yo r t o improv e th e operationa l efficienc yo f th e facilit y ar e no t considere d t o b e par t o f a pollutio n contro l projec t fo r purpose s o f thi s proposal . Suc hchange s ar e addresse d elsewher e i n thi s proposal . Also , th e sourc e stil l mus t compl ywit hal l applicabl e SI P limit s an d requirements , permi t condition s an d applicabl e NAAQ S o r PS D incremen t limits
. A s proposed , thi s pollutio ncontro l projec t proposa l wil l
no t extend t o sourc e categorie s othe r tha n electri c utilit ysteam generating units
. Th e EPAha s s o limite d thi s provisio n because , i n contras t wit ha genera l lac k o f experienc e wit hothe rP.3 2

- 3 0 - industries , EPAha s extensiv e experienc e i naddressing ne wsourc e applicabilit yissue s regarding pollutio ncontro l project s i nth e utilit yindustry
. Tha t experienc e ha s le d EPAt o conclud e tha t pollutio n contro l project s i nth e utilit yindustryar e generall y environmentall ybeneficial
.

2 . Additiona l Modeling Requirement s Apropose d pollutio n contro l projec t o r physica l o r operationa l chang e canno t resul t i na n emission s increas e tha t wil l caus e o r contribut e t o a violatio no f a nationa l ambien t ai r qualit ystandard , PS D increment , o r visibilit ylimitation
. Se e CA A§ § 110(a)(2)(c) , 165 , 169A(b) , 173 . Th e pollutio n contro l project s exclusio n doe s no t authoriz e an ysignifican t ne t increas e i n emission s tha t woul d hav e thi s proscribe d impact
. I t i s possibl e tha t a pollutio ncontro l project , whil e no t causing an yincreas e i n maximu mhourl yemissions , wil l caus e a significan t ne t increas e i nactua l emissions , whic hi ntur ncoul d
caus e o r contribut e t o th e violatio n o f a Nationa l Ambien t Ai r Qualit yStandard s (NAAQS) , incremen t o r visibilit ylimitation
. Fo r thi s reason , unde r today' s proposal , th e reviewing authorit y mayreguir e a sourc e t o performan ai r qualit yimpac t analysi s (modeling ) wheneve r i t ha s reaso nt o believ e tha t a propose d chang e wil l resul t i n a significan t ne t increas e i nactua l emission s o f an

ycriteri a pollutan t ove r level s use d fo r tha t
sourc e i n th e mos t recen t ai r qualit yimpac t analysis
. I f thi s modeling indicate s tha t thi s increas e i nemission s wil l caus e o rP.3 3

- 3 1 - contribut e t o a violatio n o f an yambien t standard , PS D incremen t
o r visibilit yviolation , th e pollutio n contro l exclusio n doe s no t apply . 3 . Th e EPA' s Existin g Polic yRegardin g Pollutio n

Contro l Project s A s note d above , generall ypollutio n contro l project s a t existin g stationarysource s ar e no t majo r modification s subjec t t o ne wsourc e revie wbecaus e the yd o no t usuall yresul t i nan increas e i n actua l emissions , an d EPAbelieve s that , i ngeneral , pollutio n contro l project s wer e no t intende d b yCongres s t o b e considere d physica l o r operationa l change s fo r purpose s o f NSR . Th e EPAcurrentl yapplie s it s PS D regulation s i n harmon y wit hit s NSP S regulations , whic hexclud e mos t pollutio ncontro l projects
. Se e 4 0 CFR60.14(e)(5) . I n1977 , Congres s incorporate d th e NSP S definitio n o f modificatio nint o th e PS D an d nonattainmen t statutes . CA A§ § 111(a)(4) , 169(a)(c) , 171(4) . I n addition , th e legislativ e historyreflect s that , a s a genera l matter , Congres s intende d t o conform th e meanin g o f "modification " fo r PS D purpose s t o th e usag e unde r th e NSP S program . Se e 12 3 Cong . Rec . H1195 7 (Novembe r 1 , 1977) . Th e EPA reiterate d thi s vie wi n 1978 . Se e 4 3 FR26396 , Jun e 19 , 1978 . Subsequently , EPAinterprete d it s NS Rregulation s t o incorporat e th e NSP S pollutio n contro l projec t exclusion. 1 4 Th e EPAlate r

1 4 Memorandu

mfro m Edwar d Reich , Director , Stationary Sourc e Complianc e Divisio n an d William

F . Pedersen , Actin g Associat e Genera l Counsel , Air , Noise , an d Radiatio nDivisio nt o Allyn M . Davis , Regio n IV (Apri l 21 , 1983) .P.3 4

- 3 2 - voice d concer n abou t incorporating th e precis e NSP S pollutio n contro l languag e i n th e NS Rcontex t absen t explicatio nthrough notice-and-commen t rulemaking largel ybecaus e o f th e ambien t ai r qualit ycomponen t o f NS Rtha t i s absen t fro mth e NSP S program. 1 5 I n recen t year s however , EPAha s consistentl yexclude d pollutio n contro l project s fro mNS Rprovide d tha t th e propose d projec t woul d b e environmentall ybeneficial , taking int o accoun t ambien t ai r quality. 1 6 I n ligh t o f th e Titl e I V requirement s and other

provision s o f th e Clea n Ai r Ac t Amendment s o f 1990- , EPAconfirm s tha t i t wil l continu e t o conside r th e overal l environmenta l consequence s o f pollutio n contro l project s fo r NS Rapplicabilit y o n a n interi mbasi s pendin g fina l actio n o nth e propose d regulatoryexclusio n fo r pollutio ncontro l projects
. B . Representativ e Actua l Annua l Emission s A s describe d above , EPApropose d t o revis e it s methodologyfo r calculating emission s increase s a t electri c utilit ystea

mgenerating sources . Th e EPApropose s t o compar e actua l emission s befor e an d afte r change s fo r al l physica l o r operationa l change s a t a nexisting electri c utilit ysteam

1 5 See , Memorandu m fro mGeral d A . Emison , Director , OAQPS , t o Regiona l Divisio nDirector s (July7 , 1986) .

1 6 See , Letter , WilliamG . Rosenber g Assistan t Administrator , EPA , t o Andre wAitken , Vic e President , Ne wEngland Powe r Servic e Co. , Marc h26 , 1991 ; Letter , Rosenber g t o Patric k M . McCarter , Senio r Vic e President , Publi c Servic e Co . o f Colorado , Jul y23 , 1990 ; Letters , Davi d Kee , Director , Ai r an d Radiatio n Division , EPARegio n V , t o Timoth yJ . Method , Assistan t Commissioner , Indiana Dept . o f Environmenta l Management , Januar y 30 , 199 0 an

d Marc h8. , 1990 .P.3 5

- 3 3 - generatin g uni t othe r tha n th e additio no f a ne wuni t o r th e replacemen t o f an existing unit
. Unde r today' s action , EPA propose s t o conside r a uni t t o b e replace d i f i t woul d constitut e
a reconstructe d uni t withi n th e meanin g o f 4 0 CF R60.15 . Sinc e ther e i s n o relevan t operating historyfo r wholl yne wunit s an d replace d units , i t i s no t possibl e t o reasonabl yprojec t post
chang e utilizatio n fo r thes e units , an d hence , thei r futur e leve l
o f "representativ e annua l actua l emissions. " Fo r othe r changes , pas t operating history , an d othe r relevan t information , provide s
a basi s fo r reasonabl e projections
. A s propose d today , th e "representativ e actua l annua l emissions " methodologyrequire s th e utilit yt o compar e it s baselin e emission s wit hit s futur e actua l emission s t o determin e i f th e propose d chang e wil l increas e actua l emissions
. Th e EPA' s existing regulation s defin e baselin e emission s a s "th e averag e rate , i n ton s pe r year , a t whic hth e uni t actuall yemitte d th e pollutan t durin g a 2-yea r perio d whic hprecede s th e particula r dat e an d whic hi s representativ e o f norma l sourc e operation. " See , e.g. , 4 0 CFR52.21 . Th e Administrato r "shall " allo wus e o f
a differen t tim e perio d "upo na determinatio n tha t i t i s mor e representativ e o f norma l sourc e operation. " J_d . Althoug hno t require d b

yth e regulations , EPAha s historicall yuse d th e 2 year s immediatel ypreceding th e propose d chang e t o establis hth e baseline
. (Se e 4 5 Fed . Reg . 52676 , 52705 , 5271 8 (1980). ) However , i n some case s i t ha s allowe d th e us e o f earlie r periods
.P.3 6

- 3 4 - Fo r example , i n WEPCO , EPAfoun d th e fourt han

d fift hyear s prio r t o th e modificatio n mor e representativ e o f WEPCO' s norma l operation s sinc e th e source' s capacit ywa s reduce d du e t o physica l problems . Th e EPApropose s todayt o retai nthi s regulatorylanguage , bu t t o adop t a ne wpresumptio nregarding it s implementation
. Unde r today' s action , th e Administrato r wil l presum e tha t
an y2 consecutiv e year s withi n th e 5 year s prio r t o th e propose d chang e i s representativ e o f norma l sourc e operation s fo r a utility
. Thi s presumptio ni s consisten t wit hth e 5-yea r perio d fo r "contemporaneous " emission s increase s an d decrease s i n4 0 CF R 52.21(b)(3)(i)(b). 1 7 Sourc e owner s o r operator s desirin g t o us e othe r tha n a 2-yea r perio d o r a baselin e perio d prio r t o th e las t 5 year s maysee k th e Administrator' s specifi c determinatio ntha t
suc hperio d i s mor e representativ e o f norma l operations. 1 8

1 7 Thi s presumptio ndoe s no t appl yt o pas t modification s a t an emission s uni t fo r th e purpos e o f determinin g contemporaneou s emissio n change s a t a sourc e an d canno t b e use d t o extend th e five yea r perio d specifie d i ntha t provision
. Se e 4 0 CFR52.21(b)(3)(1)(b) .

1 8 Th e leve l o f baselin e emission s selecte d mus t b e consisten t wit hcurren t assumption s regarding th e source' s emission s tha t ar e use d unde r th e stat e implementatio nplan s (SIP ) fo r plannin g o r permitting purposes . Thus , th e sourc e may no t selec t a leve l o f baselin e emission s highe r tha ntha t use d b y th e permittin g authorit yi nissuing a PS D o r othe r constructio n permi t t o a sourc e i n th e area , i f suc hhighe r leve l woul d resul t i n a NAAQ S o r incremen t violation , o r violat e a visibilit y limitation
.- 3 5 - Th e futur e actua l projectio n i s th e produc t of : (l ) th e hourl yemission s rate , whic hi s base d o n th e unit' s physica l an d operationa l capabilitie s following th e chang e an d federally

enforceabl e operationa l restriction s tha t woul d affec t th e hourl y emission s rat e following thi s change ; and (2 ) projecte d capacit y utilization , whic hi s base d o n(a ) th e unit' s historica l annua l utilization , an

d (b ) al l availabl e informatio nregardin g th e unit' s likel ypost-chang e capacit yutilization. 1 9 Th e projectio n o f post-chang e capacit yutilizatio n fo r applicabilit y purpose s shoul d b e base d o n a projectio no f utilizatio nfo r a perio d afte r th e physica l o r operationa l change . Specifically , EPAtodaypropose s t o allo wsource s t o bas e th e projectio n o f utilizatio n o n th e 2 year s afte r th e change , o r a differen t consecutiv e 2-yea r perio d withi nth e 1 0 year s afte r th e change , wher e th e Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations
. C . Th e Causatio n Requiremen t Th e NS Rregulatoryprovision s requir e tha t th e physica l o r operationa l chang e "resul t in " anincreas e i nactua l emission s i n orde r t o conside r tha t chang e t o b e a modification
. Se e e.g . 4 0 CFR52.21(2)(i)
. I n othe r words , NS Rwil l no t appl yunles s EPA

1 9 I n projectin g futur e utilizatio nan d emission s factors , th e permittin g authorit ymayconside r th e company' s historica l operationa l data , it s ow n representations , filing s wit hFederal , Stat e o r loca l regulatoryauthorities , and complianc e plan s develope d unde r Titl e IV o f th e 199 0 Amendments .P.3 8

- 3 6 - find s tha t ther e i s a causa l link betwee nth e propose d chang e an d
an ypost-chang e increas e i nemissions
. Th e EPAtodaypropose s t o amend it s rule s t o clarif ythi s provisio n i n th e contex t o f modification s a t electri c utilit ystea mgeneratin g units
. Unde r thes e propose d regulations , an yemission s increas e attributabl e t o a physica l o r operationa l change , suc ha s a physica l o r operationa l chang e tha t significantl yalter s th e efficienc yo f th e plant , (see , Puert o Rica nCement . 88 9 F.2 d a t 297-8) , mus t continu e t o b e include d i nth e post-chang e emission s calculation
. Today' s proposa l make s clea r tha t wher e increase d operation s ar e i n respons e t o independen t factors , suc ha s system-wid e demand growth , whic hwoul d hav e occurre d an d affecte d th e unit' s operation s eve n i nth e absenc e o f th e physica l o r operationa l change , suc hincrease s d o no t resul t fro mth e chang e an d shal l b e exclude d fro mth e projectio n o f futur e actua l emissions
. Thus , i n assessing whethe r th e propose d chang e wil l resul t i n a n increas e i n actua l emissions , utilitie s nee d no t includ e i n thei r projectio no f post-chang e utilizatio ntha t portio n o f th e increase d rat e o f utilization , i f any , du e t o factor s unrelate d t o th e physica l o r operationa l change , suc ha s an increas e i n projecte d capacit yutilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystem(o f whic htha t
sourc e i s a member ) a s a whole . Unde r thi s proposal , during a representativ e baselin e perio d (se e supra) , th e plan t mus t hav e bee nabl e t o accommodat e th eP.3 9

- 3 7 - projecte d demand growt hphysicall yan d legall yeve nabsen t th e particula r change . Increase d operation s (an d resultan t increase s i n actua l emissions ) tha t coul d no t physicall yand legall yb e accommodate d bu t fo r th e propose d physica l o r operationa l chang e shoul d b e considere d t o resul t fro mth e change . D . Repowerin g A s previousl ymentioned , Titl e I V o f th e 199 0 Amendment s grant s specia l treatmen t t o utilitie s tha t see k t o compl ywit h th e mandate d aci d rai n reduction s b yrepowering a uni t wit h qualifying clea n coa l technology . 199 0 Amendment s § § 402(12) , 409(a) . Specifically , repowering project s tha t qualif yfo r a Phas e I I complianc e extensio n wil l als o b e exemp t fromNSP S requirements , s o long a s th e repowering "doe s no t increas e actua l hourl yemission s fo r an ypollutan t regulate d unde r th e Act. " § 409(d) . Th e EPAinterpret s th e requiremen t tha t th e repowerin g no t lead t o a n increas e i n "actua l hourl yemissions " a s an expressio n o f Congressiona l inten t tha t wit hrespec t t o repowering projects , EPAshoul d us e th e same genera l approac ht o determinin g applicabilit ya s i t ha s fo r othe r physica l o r operationa l changes , discusse d above . Accordingly , EPAtoday propose s rule s tha t provid e tha t a repowerin g projec t whic h result s i n a n increas e ove r baselin e i na unit' s post
modificatio n hourl yemission s wil l no t b e eligibl e fo r thi s limite d NSP S exemption
.P.4 0

- 3 8 - Th e propose d NSP S exemptio n applie s t o repowering o f existing unit s a t existing sources , s o long a s th e projec t qualifie s fo r th e Phas e I I extensio nan d satisfie s th e "actua l hourl yemissions " increas e test . Becaus e o f thi s provision , th e reconstructio n limitation s specifie d i n 4 0 CF R60.1 5 ar e no t applicabl e t o qualifying repowering projects
. However , n o specia l treatmen t ca n b e afforde d t o a ne wuni t whic hi s locate d
a t a differen t sit e tha nth e existing uni t i t replaces . Se e CA A § 409(d) . Pursuan t t o sectio n409(e) , EPAwil l provid e expedite d NS R processin g fo r repowering project s an d wil l encourag e Stat e permittin g authoritie s t o d o th e same . E . Clea n Coa l TechnologyDemonstratio nProject s Today' s notic e als o propose s rule s implementing th e newCC T exemptio n create d b yth e 199 0 Amendments . Fo r th e purpose s o f thi s proposal , temporaryCC T demonstratio nproject s ar e define d
a s thos e CC T demonstratio n project s lasting 5 year s o r less . Titl e IV

give s thes e project s a nexemptio nfromNSPS , PS D an d nonattainmen t requirements
. Id. , § 415(b)(2) . However , th e facilit ywoul d stil l b e subjec t t o an yapplicabl e SI P an d mus t compl ywit han

yothe r requirement s necessaryt o attai nan d maintai n NAAQS . Thi s ruling propose s t o implemen t thi s provisio n an d clarifie s tha t EPAconsider s th e 5 yea r perio d a s starting o n th e dat e o f startu

p (a s define d i n4 0 CFR60.2) . Atemporary , demonstratio n projec t mayb e converte d t o a permanen t statu s a t- 3 9 -

an ytime , provide d i t meet s al l th e requirement s tha t appl yt o a permanen t CC T projec t criteri a a t th e tim e o f conversion
. Further , EPApropose s tha t a t th e en d o f a temporary project , th e facilit ymus t b e returne d t o pre-demonstratio n condition s an

d hourl yemissio n rate s (or lower) . Th e retur n o f th e facilit yt o it s pre-demonstratio n physica l and operationa l conditio n woul d no t resul t i nth e los s o f th e actua l emission s margi n betwee n pre-demonstratio nactua l emission s rat e and SIP

allowabl e emission s rate s fo r tha t facility
. Rather , th e facilit ywoul d b e treate d a s i f th e temporarydemonstratio n projec t ha d neve r occurred. 2 0 Thi s proposa l doe s no t extend t o emission s increase s tha t
ar e unrelate d t o th e conduc t o f temporarydemonstratio nprojects
. Th e EPAconsider s emission s increase s (above th e pre demonstratio n levels ) tha t ar e attributabl e t o physica l o r operationa l changes , othe r tha n thos e necessaryt o restor e tha t uni t t o it s pre-demonstratio ncondition , t o b e beyond th e scop e o f th e Congressiona l exemption
.

2 0 Thi s woul d b e th e cas e eve ni f ther e wer e smal l difference s i n th e post-demonstratio nphysica l and operationa l condition s du e t o a technica l inabilit yt o restor e th e uni t t o it s precis e pre-demonstratio n condition , o r du e t o norma l variabilit yi n th e coa l used . Thus , EPAwoul d no t see k t o appl y NSP S o r NS Rbecaus e o f a post-demonstratio nemission s increas e attributabl e solel yt o an increas e i nth e hour s o f operatio no r productio n rat e o f th e uni t (subjec t t o th e NSP S limitatio n tha t th e productio n rat e increas e mus t b e accomplishe d withou t a capita l expenditure)
.P.4 2

- 4 0 - Today' s actio n als o propose s t o implemen t anexemptio n fro m NSP S an d PS D requirement s fo r repowering project s whic har e awarde d funding ' fro mth e DO E a s permanen t CC T demonstratio n project s (o r simila r project s funde d b yEPA ) s o long a s potentia l emission s (se e 52.21(b)(4) ) fro m th e uni t d o no t increas e a s a resul t o f th e project
. § 415(b)(3) . However , repowering project s tha t qualif ya s pollutio ncontro l project s wil l b e treate d a s . othe r pollutio n contro l project s fo r th e purpose s o f th e nonattainmen t provision s o f Titl e I o f th e Act . Finally , today' s proposa l woul d implemen t th e statutory exemption s i n sectio n 415(c) . I n tha t section , Congres s provide d
a n exemptio n fro

m NSP S an

d PS D fo r th e reactivatio no f "very clea n units " otherwis e i n complianc e wit hth e Ac t tha t ha d bee n shu t dow

n fo r a t leas t th e 2 year s prio r t o enactmen t o f th e 199 0 Amendment s an

d that , prio r t o th e shutdown , had bee n equippe d wit hpollutio n control s wit ha remova l efficienc yo f a t leas t 8 5 percen t fo r sulfu r dioxid e an d 9 8 percen t fo r particulates , an d ha d bee n equippe d wit hlow-NOxburners . Thi s exemptio nappear s t o hav e bee n narrowl ytailore d an d i s no t expecte d t o hav e widesprea d applicability
. Becaus e thes e propose d rule s merel yimplemen t straight

forward statutoryexemption s tha t wer e immediatel yeffectiv e upo n passag e o f th e 199 0 Amendments , EPAintends , a s a matte r o f statutoryinterpretation , t o followth e policie s se t fort hi n today' s proposa l pending fina l action
.- 4 1 -

F . Calculatio n o f NSP S Baselin e A s discusse d i n sectio nI I o f thi s notice , "an yphysica l o r operationa l chang e t o a n existing facilit ywhic hresult s i na n increas e i n th e emissio n rat e t o th e atmospher e o f an ypollutan t t o whic ha standar d applies " i s a modificatio nfo r NSP S applicabilit ypurpose s Se e 4 0 CF R§ 60.14(a) . Th e NSP S regulation s implementing thi s genera l definitio nfocu s o n increase s i n hourl yemissions , expresse d i n kilogram s o f pollutan t discharge d pe r hour . T o determin e i f a n increas e i n hourl yemission s ha s occurre d a t a unit , a pre-chang e baselin e
mus t b e established
. Unde r curren t regulations , th e emission s rat e befor e an d afte r a physica l o r operationa l chang e i s evaluate d a t eac huni t b ycomparin g th e curren t hourl y potentia l emission s a t maximu moperating capacit yt o hourl y emission s a t maximu mcapacit yafte r th e change . I nthi s calculation , th e reviewing authorit ydisregard s th e unit' s maximu mdesig n capacity. 2 1 Th e origina l desig n capacit yo f a unit , t o th e exten t i t differ s from actua l maximu

m capacit ya t th e tim e tha t th e baselin e i s establishe d du e t o physica l deterioratio n o f th e facility , i s immateria l t o thi s calculation
.

2 1 Se e 3 9 Fed . Reg . 36,94 8 col . 1 (propose d rule) . I n WEPCO , th e utilit ycontende d tha t baselin e capacit yfo r th e purpos e o f determining whethe r anincreas e i nemissio n rat e occur s fo r purpose s o f a n NSP S modificatio n i s th e origina l desig n capacit yo f th e facility
. However , th e cour t rejecte d WEPCO' s argumen t tha t origina l design capacit yo r pas t "representative " capacity , n o longe r achievabl e a t th e plant , had t o b e use d fo r th e baselin e emission s rate .P.4 4

- 4 2 - TodayEPAi s proposing that , fo r an existin g electri c utilit ysteamgenerating unit , th e pre-chang e baselin e fo r NSP S applicabilit ypurpose s shal l b e calculate d usin g th e highes t hourl yemission s rat e achievabl e a t an ytim e durin g th e 5 year s prio r t o th e change . Thi s proposa l retain s th e keyconcep t i n existing regulation s tha t th e baselin e b e determine d during a perio d tha t i s roughl ycontemporaneou s wit hth e propose d chang e a t th e affecte d facility
. Th e EPAbelieve s tha t thi s propose d revision , whil e modest , i s stil l necessaryt o avoi d th e curren t regulation' s undu e emphasi s on th e physica l conditio n o f th e affecte d facilit yimmediatel yprio r t o th e change . Today' s mor e flexibl e provisio n enable s unit s t o establis ha baselin e tha t i s representativ e o f it s physica l an d operationa l capacit yi nrecen t years , whil e stil l precluding th e us e o f a baselin e tie d t o origina l desig n capacity , whic ha s note d abov e maybea r n o relationshi p t o th e facility' s capacit yi n recen t years . Withou t thi s revision , the NSP S regulation s mayundul y burde n utilitie s undertaking physica l o r operationa l change s i n conjunctio n wit hth e aci d rai nprogram . Fo r instance , i f a uni t ha s broke n down an d i s i n nee d o f repairs , th e utility' s baselin e wil l b e artificiall ylow . Th e propose d chang e wil l allo w utilitie s t o demonstrat e tha t a nearlier , highe r capacit ywa s mor e representativ e o f th e unit' s maximu mhourl yemission s rate .- 4 3 -

G . Utilit yBAC T Presumptio nfo r NOx I n today' s notice , EPApropose s t o adop t a presumptio nthat , i n th e cas e o f PS D permit s issue d b yEPAunde r 4 0 CF R52.21 , bes t availabl e contro l technology(BACT ) fo r emission s o f nitroge n oxide s fromexisting coal-fire d electri c utilit ysteamgeneratin g unit s undergoin g a modificatio n i : th e technologyrequire d unde r sectio n 40 7 o f th e Clea n Ai r Act . I n general , thi s wil l cal l fo r th e us e o f combustio n modificatio n and/o r low-NOxburner s o r similar , cost-effectiv e technologie s b ythos e utilitie s require d t o obtai n PS D permit s fo r NOxemission s following fina l actio n o n today' s proposal . I n brief , sectio n 40 7 require s mos t utilit yunit s subjec t t o phas e I and phas e I I t o mee t NO xemissio n limitation s o n the.sam e dat e a s th e phas e I o r phas e I I S0 2 emissio nlimitation s becom e effective
. Th e Administrato r mus t establis hannua l emissio n limitation s (based o n rate s liste d i nth e section ) fo r tangentially-fixe d boiler s an d drybottomwall-fire d boiler s withi n 1 8 month s o f enactment . Thes e limitation s mus t b e achievabl e wit hlow-NOxburne r t-chnology . CA A§ 407(b)(1) . Th e Administrato r mus t promulgat e annua l emissio nlimitation s fo r al l othe r boiler s b

yJanuary1 , 1997 , base d o na "bes t systemo f continuou s emissio n reductio n . . . whic hi s comparabl e t o th e cos t of " low-NO xburners . B yth e same date , th e Administrato r
maymak e th e rate s fo r boile r type s identifie d i nsectio nP.4 6

- 4 4 - 407(b)(1 ) mor e stringen t i f mor e effectiv e low-NOxburne r technologyi s available
. CA A§ 407(b)(2) . Low-NOxburner s ar e commerciall yavailabl e an d ca n b e retrofitte d o n man

yboile r types , providing a highdegre e o f emission s reductio n a t relativel ylowcosts . Depending o n boile r type , low-NOxburner s can reduc e emission s o f NO xb y approximatel y2 0 t o 6 0 percent . Agai ndependin g o n boile r typ e an d othe r factors , th e cos t o f replacing conventiona l burner s wit hthes e control s i s i n th e rang e o f $8.0 0 t o $16.0 0 pe r kilowatt
. Othe r NO xcontro l technologie s ar e bein g develope d fo r retrofitte d us e o n a t leas t some coal-fire d electri c utilit y units , and thu s ca n provid e a muc hgreate r degre e o f emission s reductions
. Thes e includ e selectiv e noncatalyti c reductio n(SNCR
o r "therma l de-NOx" ) an d selectiv e catalyti c reductio n (SCR) . (In addition , DO E ha s funde d tw o newtechnologie s unde r it s CC T demonstratio n progra mwhic har e designe d fo r th e simultaneou s remova l o f S0 2 , NOxan d particulat e matte r tha t maybecom e commerciall y"available " i n th e future.) 2 2 However , SN Ran d SNC Rar e no t i n us e i n thi s countrya s retrofi t technologie s fo r coal-fire d boilers , an d th e DO E sponsore d project s hav e no t ye t bee n demonstrated . Curren t estimate s o f contro l cost s fo r thes e

2 2 On e technolog

y— lowNOx/SOxBurne r Retrofi t —i s designe d specificall yfo r cyclon e boiler s whic hcanno t b e retrofi t wit hlowNOxburner s whil e th e othe r —th e Advance d Slagging Combusto r —i s applicabl e t o a numbe r o f boile r type s- 4 5 -

technologie s ar e muc hhighe r tha nfo r low-NOxburners , especiall y whe n considere d i n th e contex t o f retrofittin g existin g units
. Th e EPAha s i n th e pas t issue d guidanc e document s effectivel ycreatin g presumption s tha t certai ntechnologie s constitute d BAC T fo r certai n sourc e categories
. Se e Memorandum , Operatio n Guidanc e o n Contro l Technologyfo r Ne wand Modifie d Municipa l Wast e Combustors , fro mGeral d A . Emison , Director , Offic e o f Ai r Qualit yPlanning an d Standards , EPA , Jun e 26 , 1987 , p . 5 . Th e EPAbelieve s i t i s appropriat e t o p.. - js e t o d o s o her e a s wel l i n th e cas e o f low-NOxburner s fo r modifie d coal

fired utilit yboiler s i n ligh t o f th e strong congressiona l polic y judgmen t favoring us e o f tha t technologyfo r aci d rai ncontro l reflecte d i n sectio n 407 . Sectio n 169(3 ) o f th e Act , 4 2 U.S.C . 7479(3 ) define s BAC T
as :
a n emission s limitatio n base d o nth e maximu m degre e o f reductio no f eac hpollutan t subjec t t o regulatio n unde r th e Clea nAi r Ac t emitte d fromo r whic hresult s fro man ymajo r emitting facility , whic hth e permitting authority , o n a case-by-cas e basis , taking int o accoun t energy , environmental , an d economi c impact s and othe r costs , determine s i s achievabl e fo r suc hfacilit ythroughapplicatio no f productio n processe s an d availabl e methods , systems , and techniques , including fue l cleaning , clea n fuels , o r treatmen t o r innovativ e fue l combustio ntechnique s fo r contro l o f eac hsuchpollutant . I n n o even t shal l applicatio n o f "bes t availabl e contro l technology " resul t i n emission s o f an y pollutant s whic hwil l excee d th e emission s allowe d b

yan applicabl e standar d establishe d pursuan t t o sectio n 741 1 o r 741 2 o f thi s title
. Emission s fro man ysourc e utilizin gP.4 8

- 4 6 - clea n fuels , o r an

yothe r means , t o compl y wit hthi s paragraphshal l no t b e allowe d t o increas e abov e level s tha t woul d hav e bee n require d unde r thi s paragrapha s i t existe d prio r t o enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 . Th e BAC T provisio n reflect s congressiona l inten t bot ht o gran t permittin g authoritie s broad discretio nt o weighth e statutoryfactor s a s the yse e fi t i nreaching a fina l substantiv e determinatio n o n BAC T an d t o creat e a procedura l methodologytha t woul d provid e a mechanis mfo r stimulating th e widesprea d us e o f effectiv e pollutio n contro l technologies. 2 3 Th e EPAbelieve s tha t today' s propose d presumptio n i s consisten t wit hBAC T requirement s becaus e i t doe s no t purpor t t o reliev e th e permitting authorit yo f th e obligatio nt o conside r a representativ e se t o f availabl e technologie s an d t o weighth e statutoryfactor s i n reaching BAC T determinations
. Rather , i t reflect s a n exercis e o f polic yjudgmen t b yEPAwher e i t i s th e permitting authorit ytha t i nmos t case s a BAC T analysi s o f currentl ydemonstrate d technologie s fo r retrofitting existing utilit yboiler s woul d lead t o th e selectio n o f lowNO xburner s and/o r combustio n modification s identifie d i n sectio n 407(b)(1) . AlthoughEPAha s authorit yunde r th e presen t regulation s t o creat e thi s presumptio n regarding BAC T fo r NOx , EPAi s soliciting commen t prio r t o adopting suc ha presumptio ni norde r t o obtai n

2 3 Se e S . Rep . No . 95-217 , 95t hCong. , 1st . Sess . 3 1 (1977) ; Statemen t o f Senato r Muskie , 1 2 3 Cong . Rec . 5917 1 (June 8 , 1977) .- 4 7 -

th e view s o f th e publi c o n th e polic yconclusion s discusse d above . Thi s propose d presumptio nwoul d no t appl yi nState s wit hPS D program s tha t hav e bee n incorporate d int o stat e implementatio n plan s unde r regulation s promulgate d a t 4 0 CF R51.166 . However , suc hState s ar e encourage d t o adop t thi s presumptio na s a matte r o f stat e policy
. H . Applicabilit yDetermination s I n mos t instances , sourc e owner s o r operator s ar e abl e t o readil yascertai n whethe r ne wsourc e revie wrequirement s appl yt o them . Consequently , i n administering thes e requirements , EP A doe s no t requir e source s t o obtai n a forma l applicabilit y determinatio n befor e proceedin g wit hconstruction
. I nkeeping wit htha t practice , EPAwil l no t requir e utilitie s t o see k applicabilit ydetermination s unde r eithe r th e revise d regulation s propose d todayo r th e interpretation s o f existing regulation s containe d i n thi s preamble . Utilitie s i n mos t case s ca n readil y ascertai n ho wthi s notic e wil l affec t them . Th e EPAanticipates , however , tha t question s wil l aris e regarding certai n aspect s o f thi s proposal . Becaus e some instance s involv e discret e judgments , utilitie s maywis ht o obtai ndetermination s o f applicability
. Th e EPAwil l provid e suc hdetermination s upo n request . Suc hrequest s shoul d b e submitte d togethe r wit h appropriat e documentatio nt o th e appropriat e permittin g authority
.P.5 0

- 4 8 - IV . ADMINISTRATIVE REQUIREMENT S A . Docke t Adocke t ha s bee n establishe d fo r thi s actio n unde r sectio n 307(d)(1)(I ) an

d (N ) o f th e Clea nAi r Act , 4 2 U.S.C . 7607(d)(1)(I ) an

d (N) . Th e docke t i s an organize d an d complet e fil e o f al l informatio n considere d i n th e developmen t o f thi s ruling
. Th e docke t i s intende d t o allo wth e publi c t o identif y an d locat e document s relate d t o thi s ruling
. Th e docke t numbe r fo r thi s ruling i s A-90-06 . B . Paperwor k Reductio n Ac t No additiona l publi c reporting burde n wil l resul t fromthi s ruling
. Al l informatio ncollectio n requirement s o f th e Federa l NS Ran d NSP S regulation s hav e bee n approve d b yth e Offic e o f Managemen t an

d Budge t (OMB ) unde r th e provision s o f th e Paperwor k Reductio n Act , 4 4 U.S.C . 3501 , et . seq. , an d hav e bee nassigne d OMB contro l number s 2060-000 3 fo r NSR , an d 2060-0023 , 2060-002 6
an d 2060-007 2 fo r NSPS . Th e effec t o f thi s rul e woul d b e a reductio n i n paperwor k relate d t o complying wit hNS Ran d NSP S requirements , sinc e thi s ruling provide s additiona l clarificatio n a s t o modification s tha t mayb e exclude d fro mthes e reguirements
. C . OM B Revie w Unde r Executiv e Orde r 1229 1 (E.O . 12291) , EPAmus t judg e whethe r a rul e i s "major " an d therefor e subjec t t o th e requiremen t o f a regulatoryimpac t analysi s (RIA) . Thi s ruling i s a majo r rule . However , EPAha s no t prepare d anRI Abecaus e i tP.5 1

- 4 9 - wil l no t resul t i n an ysignificatio nadvers e environmenta l effect s an

d wil l reduc e th e economi c cost s o f meetin g th e requirement s o f th e CAA . Thi s ruling wa s submitte d t o th e OM B fo r revie wa s require d b yE.O . 12291 . Anywritte ncomment s from OM B t o EPAand an

yEPArespons e t o thos e comment s ar e include d i n Docke t A-90-06 . D . Effectiv e Dat e Sectio n 4(d ) o f th e Administrativ e Procedure s Ac t (APA) , 5 U.S.C . 553(d) , require s a 30-da ywaitin g perio d befor e makin g a substantiv e rul e effective
. Sinc e th e regulatoryrevision s bein g propose d todayar e considere d substantive , the yar e subjec t t o th e notice-and-commen t requirement s o f th e AP Aand wil l becom e effectiv e onl yafte r publi c comment s hav e bee nreceive d an d considered , an

d fina l actio n ha s bee n taken . Th e portion s o f thi s notic e tha t merel yconfirm EPApolic yar e effectiv e immediately
. E . RegulatoryFlexibilit yAc t Thi s actio n i s no t subjec t t o th e certificatio nprovision s o f sectio n 605(b ) o f th e RegulatoryFlexibilit yAc t (RFA ) becaus e thi s rul e wil l resul t i n a reductio no f administrativ e cost s and
n o increas e i n contro l costs , therefor e havin g n o significan t impac t o n industry
.P.5 2

- 5 0 - Lis t o f Subject s 4 0 CF RPar t 5 1 Administrativ e procedur e an d practices , intergovernmenta l relations , ai r pollutio n control , NSR , CC T demonstrations , sulfu r oxides , nitroge n dioxide , particulat e matter , carbo nmonoxide , hydrocarbons , lead . 4 0 CF RPar t 5 2 Ai r pollutio n control , NSR , CC T demonstrations , sulfu r oxides , particulat e matter , nitroge n dioxide , carbo n monoxide , hydrocarbons , lead . 4 0 CF RPar t 6 0 Ai r pollutio n control , NSPS , CC T demonstrations , sulfu r oxides , particulat e matter , nitroge ndioxide , carbo n monoxide , hydrocarbons , lead . Dated : Jun e 3 , 199 1
WilliamK . Reilly , Administrato rP.5 3

Fo r th e reason s se t fort hi n th e preamble , Par t 5 1 o f Chapte r I o f Titl e 4 0 o f th e cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows : Par t 5 1 - REQUIREMENT S FO RPREPARATION , ADOPTION , AN DSUBMITTA

L O F IMPLEMENTATIO

N PLANS . 1 . Th e authorit ycitatio nfo r Par t 5 1 i s amende d t o rea d a s follows : (T o b e added ) 2 . Sectio n 51.16 5 i s propose d t o b e amende d t o rea d a s follows : 51.16 5 Permi t requirements . (a ) * * * (1 ) * * * (v ) * * * (C ) Aphysica l chang e o r a chang e i nth e metho d o f operatio n shal l no t include : **** * (8 ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a n existing electri c utilit ystea

mgenerating unit , unles s th e reviewin g authorit ydetermine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , an d except : (i ) whe n th e reviewing authorit yha s reaso nt o believ e tha t th e pollutio ncontro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysi s i n th e are a conducte d fo r th e purpos e o f Titl e I , i f any , an d (ii ) th e reviewing authorit ydetermine s tha t th e increas e wil l caus e o r contribut e t o a violatio n o f an yambien t standard , PS D increment , o r visibilit ylimitation
. (9 ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technologydemonstratio n project , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s located , an dP.5 4

- 2 - (ii ) othe r requirement s necessaryt o attai nand maintai n th e nationa l ambien t ai r qualit ystandard s durin g th e projec t an d afte r i t i s terminated
. (10 ) Th e reactivatio n o f a veryclea n coal

fire d electri c utilit ystea mgeneratin g unit
.
(xii ) * * * (D ) Fo r an

yemission s uni t (othe r tha na n electri c utilit ystea

m generating uni t specifie d i n paragrap h (E ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o ntha t date . (E ) Fo r an electri c utilit ystea mgenerating uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existing unit ) actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit
. (xx ) "Electri c utilit ystea mgenerating unit " mean s an y stea melectri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha none-third o f it s potentia l electri c outpu t capacit yan d mor e tha n2 5 MWelectrica l outpu t t o an yutilit ypowe r distributio nsystemfo r sale . An ysteam supplie d t o a stea

mdistributio nsystemfo r th e purpos e o f providing steamt o a steam-electri c generato r tha t woul d produc e electrica l energ

yfo r sal e i s als o considere d i n determinin g th e electrica l energyoutpu t capacit yo f th e affecte d facility
. (xxi ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e two-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio no f a unit , (or a differen t consecutiv e two-yea r perio d withi n1 0 year s afte r tha t change , wher e th e permitting authorit ydetermine s tha t suc h perio d i s mor e representativ e o f norma l sourc e operations) , considering th e effec t an ysuc hchang e wil l hav e o nincreasin g o r decreasing th e hourl yemission s rat e an d o n projecte d capacit y utilization
. I n projecting futur e emission s th e permittin g authorit yshall :

(A ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

n representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e IV

o f th e CleanAi r Act ; an dP.5 5

- 3 - (B ) exclude , i ncalculating an yincreas e i nemission s tha t result s fromth e particula r physica l chang e o r chang e i n th e metho d o f operatio na t a n electri c utilit ystea

m generating unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o a n increas e i nprojecte d capacit y utilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystem

a s a whole . (xxii ) "Temporaryclea ncoa l technologydemonstratio n project " mean s a clea n coa l technolog ydemonstratio nprojec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic h complie s wit hth e Stat e implementatio npla nfo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an

d maintai n th e nationa l ambien t ai r qualit ystandard s during th e projec t an d afte r i t i s terminated
. (xxiii ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a newo r existing facilit ywhic h wil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i n th e generatio n o f electricity , o r proces s stea mwhic hwa s no t i n widesprea d us e a s o f Novembe r 15 , 1990 . (xxiv ) "Clea n coa l technologydemonstratio nproject " mean s a projec t usin g fund s (1 ) appropriate d unde r th e headin g •Departmen t o f Energy-Clea nCoa l Technology, ' up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r (2 ) simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifying projec t ^shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project
. (xxv ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit ysteamgeneratin g unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit y uni t afte r a perio d o f discontinue d operatio nwher e th e unit : (i ) ha s no t bee n i n operatio nfo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e tim e o f enactment ; (ii ) wa s equippe d prio r t o shut-dow nwit ha continuou s systemo f emission s contro l tha t achieve s a remova lP.5 6

_4 _ efficienc yfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; and (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act . (xxvi)"Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a n existing electri c utilit ystea

mgenerating uni t fo r purpose s o f reducing emission s fro msuc hunit
. Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e and nitroge noxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s pollutin g tha n th e fue l i n us e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technologydemonstratio n projec t conducte d unde r Titl e II , sectio n 101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea ncoa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency ; o r (iv ) a permanen t clean coa l technologydemonstratio n projec t tha t constitute s a repowering project
.P.5 7

- 5 - 3 . Sectio n 51.16 6 i s propose d t o b e amende d t o read a s follows : 51.16 6 Preventiono f significant deteriorationo f ai r quality . **** * (b ) * * * (2 ) * * * (iii ) Aphysica l chang e o r chang e i nth e metho d o f operatio n shal l no t include :

* * * * (h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t an existing electri c utilit ystea mgeneratin g unit , unles s th e reviewing authorit ydetermine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall y beneficia l an

d except : (a ) whe n th e reviewing authorit yha s reaso n t o believ e pollutio n contro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an y criteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f Titl e I , i f any , an d (b ) th e reviewing authorit ydetermine s tha t th e increas e wil l caus e o r contribut e t o a violatio n o f an yambien t standard , PS D increment , o r visibilit ylimitation
. (i ) an yphysica l chang e o r chang e i nth e metho d o f operatio n a t a n existing electri c utilit ygeneratin g uni t (othe r tha n th e additio no f a ne wuni t o r th e replacemen t o f a n existing unit ) tha t woul d no t resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f a regulate d pollutan t a t th e unit
. (j ) Th e installation , operation , cessation , o r remova l o f a temporaryclea ncoa l technologydemonstratio n project , provide d tha t th e projec t complie s with : (i ) th e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s located ; an d (ii ) othe r requirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit yP.5 8

- 6 - standard s during th e projec t an d afte r i t i s terminated
. (k ) Th e installatio no r operatio no f a permanen t clea n coa l technologydemonstratio n projec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i na n increas e i n th e potentia l t o emi t o f an y regulate d pollutan t emitte d byth e unit
. Thi s exemptio n shal l appl yo n a pollutant-by

pollutan t basis
. (1 ) Th e reactivatio n o f a ver yclea ncoal

fire d electri c utilit ystea mgeneratin g unit
.
(21 ) * * * (iv ) Fo r an

yemission s uni t (othe r tha n anelectri c utilit ystea

mgenerating uni t specifie d i n paragrap h (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o n tha t date . (v ) Fo r an electri c utilit ystea mgeneratin g uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existing unit ) actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e uni t following th e physica l o r operationa l change . (30 ) "Electri c utilit ystea mgenerating unit " mean s an ystea m electri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha none-thir d o f it s potentia l electri c outpu t capacit yan

d mor e tha n 2 5 MWelectrica l outpu t t o an y utilit ypowe r distributio nsystemfo r sale . An ysteam supplie d t o a stea

mdistributio n systemfo r th e purpos e o f providing stea

mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energ youtpu t capacit yo f th e affecte d facility
. (31 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n a t a nexisting electri c utilit ystea

mgenerating uni t fo r purpose s o f reducing emission s fro

msuc hunit
. Suc hchange s ar e limite d to : (i ) th e installatio n o f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite dP.5 9
" 1

- 7 - t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i n th e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting tha nth e fue l i n us e prio r t o th e change , including bu t no t limite d t o natura l ga s o r coa l re-burning , co-firing o f natura l ga s and othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea n coa l technologydemonstratio n projec t conducte d unde r Titl e II , sectio n101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency , o r (iv ) a permanen t cleancoa l technologydemonstratio n projec t tha t constitute s a repowering projec t (32 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e two-yea r perio d afte r a physica l chang e o r chang e i nth e metho d o f operatio n o f a unit , (or a differen t consecutiv e two
yea r perio d withi n 1 0 year s afte r tha t change , wher e th e reviewin g authorit ydetermine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considerin g th e effec t an ysuc hchang e wil l hav e o n increasin g o r decreasing th e hourl yemission s rat e an d o n projecte d capacit yutilization
. I nprojectin g futur e emission s th e reviewing authorit yshall : (A ) conside r al l relevan t information , includin g bu t no t limite d to , historica l operationa l data , th e company' s ow

n representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e IV

o f th e Clea n Ai r Act ; and (B ) exclude , i n calculating an yincreas e i n emission s tha t result s fro

m th e particula r physica l chang e o r chang e i n th e metho d o f operatio na t a n electri c utilit ystea

mgenerating unit , tha t portio no f th e unit' s emission s following th e chang e tha t i s attributabl e t o a n increas e i n projecte d capacit y utilizatio n a t th e uni t tha t i s unrelate d t o th eP.6 0

- 8 - particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (33 ) "Clean coa l technology " mean s an ytechnology , including technologie s applie d a t th e precoinbustion , combustion , o r pos t combustio n stage , a t a ne wo r existin g facilit ywhic h wil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i nth e generatio no f electricity , o r proces s stea

mwhic hwa s no t i nwidesprea d us e a s o f Novembe r 15 , 1990 . (34 ) "Clean coa l technolog ydemonstratio nproject " mean s a projec t usin g fund s (1 ) appropriate d unde r th e heading 'Departmen t o f Energy-Clea n Coa l Technology' , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clean coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio nfo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project
. (35 ) "Temporaryclea n coa l technolog ydemonstratio nproject " mean s a clea n coa l technolog ydemonstratio nprojec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic h complie s wit hth e Stat e implementatio npla nfo r th e stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai nth e natio n ambien t ai r qualit ystandards * during an d afte r th e projec t i s terminated
. ( 3 6)(i ) "Repowering " mean s replacemen t o f a n existing coal

fire d boile r wit hon e o f th e following clea ncoa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t and indirec t coal-fire d turbines , integrate d gasificatio n fue l cells , o r a s determine d b

yth e Administrator , i n consultatio nwit h th e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technologycapabl e o f controllin g multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technolog yi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 . (ii ) Repowerin g shal l als o includ e an yoi l and/o r gas-fire d uni t whic ha s bee nawarde d clea ncoa l technolog y- 9 - demonstratio n funding a s o f January1 , 1991 , b yth e Departmen t o f Energy . (iii ) Th e reviewing authorit yshal l giv e expedite d consideratio n t o permi t application s fo r anysourc e tha t satisfie s th e reguirement s o f thi s subsectio n and i s grante d a n extensio nunde r § 40 9 o f th e Clea nAi r Act . (37 ) "Reactivatio n o f a veryclea ncoal-fire d electri c utilit y stea mgeneratin g unit " mean s an yphysica l chang e o r chang e i nth e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i n operatio n fo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 , an

d th e emission s fro m suc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e tim e o f commencemen t o f operation s following reactivation ; an

d - (iv ) i s otherwis e i n complianc e wit hth e requirement s o f th e Clea n Ai r Act .P.6 2

- 1 0 - Fo r th e reason s se t fort hi nth e preamble , Par t 5 2 o f Chapte r I o f Titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows : Par t 52-APPROVA

L AN DPROMULGATIO

N OF IMPLEMENTATIO

N PLANS 1 . Th e authorit ycitatio nfo r Par t 5 2 i s amende d t o read a s follows : (T OB E ADDED ) 2 . Sectio n 52.2 1 i s propose d t o b e amende d t o rea d a s follows : 52.2 1 Preventio

no f significant deteriorationo f ai r quality
.
(b ) (2 ) * * (iii ) Aphysica l chang e o r a chang e i nth e metho d o f

operatio n shal l no t include : **** * (h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t a n existing electri c utilit ystea m generating unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , an d except : (a ) whe n th e Administrato r ha s reaso nt o believ e tha t th e pollutio ncontro l projec t woul d resul t i n a significan t ne t increas e i n representativ e actua l annua l emission s o f an ycriteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f Titl e I , i f any , an d (b ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio n o f an y ambien t standard , PS D increment , o r visibilit y limitation
. (i ) Th e installation , operation , cessation , o r remova l o f a temporaryclea n coa l technology demonstratio n project , provide d tha t th e projec t complie s with :P.6 3

- 1 1 " (i ) th e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s located , an d (ii ) othe r requirement s necessaryt o attai n an d maintai n th e nationa l ambien t ai r qualit y standard s during th e projec t an d afte r i t i s terminated
. (j ) Th e installatio no r operatio no f a permanen t clea ncoa l technologydemonstratio n projec t tha t constitute s repowering , provide d tha t th e projec t doe s no t resul t i na n increas e i n th e potentia l t o emi t o f an y regulate d pollutan t emitte d b yth e unit
. Thi s exemptio n shal l appl yo n a pollutant-by

pollutan t basis
. (k ) Th e reactivatio no f a veryclea n coal

fire d electri c utilit ystea mgeneratin g unit
.
(21 ) * * * (iv ) Fo r an

yemission s uni t (othe r tha n a nelectri c utilit ystea

m generating uni t specifie d i n paragrap h (v ) o f thi s subsection ) tha t ha s no t begunnorma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o n tha t date . (v ) Fo r a n electri c utilit ystea mgeneratin g uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existin g unit ) actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit
. (31 ) "Electri c utilit ystea mgenerating unit " mean s an ysteam electri c generating uni t tha t i s constructe d fo r th e purpos e o f supplyin g mor e tha none-thir d o f it s potentia l electri c outpu t capacit yan d mor e tha n2 5 MWelectrica l outpu t t o an y utilit ypowe r distributio n systemfo r sale . An ystea m supplie d t o a stea

m distributio nsystem fo r th e purpos e o f providin g stea

mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determinin g th e electrica l energ youtpu t capacit yo f th e affecte d facility
. (32 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t a nexisting electri cP.6 4

- 1 2 - utilit ystea

mgenerating uni t fo r purpose s o f reducing emission s fro

msuc hunit
. Suc hchange s ar e limite d to : (i ) th e installatio no f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio n fo r sulfu r dioxid e an d nitroge n oxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting tha n th e fue l i nus e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technologydemonstratio n projec t conducte d unde r Titl e II , sectio n101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (section 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clean coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency ; o r (iv ) a permanen t clea ncoa l technologydemonstratio n projec t tha t constitute s a repowering project
. (33 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e two-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio no f a unit , (or a differen t consecutiv e two-yea r perio d withi n1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suc h perio d i s mor e representativ e o f norma l sourc e operations) , considering th e effec t an ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d on projecte d capacit yutilization
. I nprojecting futur e emission s th e Administrato r shall : (i ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow

n representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e IV

o f th e Clea n Ai r Act ; an d (ii ) exclude , i n calculating an yincreas e i n emission s tha t result s fro

m th e particula r physica l chang e o r chang e i n th e metho d o f operatio n a t anelectri cP.6 5



# 1

- 1 3 - utilit ystea

mgenerating unit , tha t portio n o f th e unit' s emission s following th e chang e tha t i s attributabl e t o a nincreas e i n projecte d capacit y utilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an yincrease d utilizatio n du e t o th e rat e o f electricit ydemand growt hfo r th e utilit ysystema s a whole . (34 ) "Clea n coa l technology " mean s an ytechnology , includin g technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic h wil l achiev e significan t reduction s i nai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i n th e generatio no f electricity , o r proces s stea

mwhic hwa s no t i nwidesprea d us e a s o f Novembe r 15 , 1990 . (35 ) "Clean coa l technologydemonstratio nproject " mean s a projec t using fund s (1 ) appropriate d unde r th e headin g •Departmen t o f Energy-Clea n Coa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio n o f clea n coa l technology , o r (2 ) simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifyin g projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio n project
. (36 ) "Temporaryclea n coa l technologydemonstratio nproject " mean s a clea n coa l technologydemonstratio n projec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic h complie s wit hth e Stat e implementatio nplan s fo r th e Stat e i n whic hth e projec t i s locate d an d othe r requirement s necessaryt o attai n an d maintai nth e nationa l ambien t ai r qualit ystandard s durin g th e projec t an d afte r i t i s terminated
. (37)(i ) "Repowering " mean s replacemen t o f a nexistin g coal

fire d boile r wit hon e o f th e following clea ncoa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio ncombine d cycle , magnetohydrodynamics , direc t an d indirec t coal-fire d turbines , integrate d gasificatio nfue l cells , o r a s determine d b

yth e Administrator , i n consultatio nwit h th e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an d an yothe r technologycapabl e o f controlling multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan

d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi n widesprea d commercia l us e a s o f Novembe r 15 , 1990 .P.6 6

- 1 4 - (ii ) Repowering shal l als o includ e an yoi l and/o r gas-fire d uni t whic hha s bee n awarde d clea ncoa l technology demonstratio n funding a s o f January1 , 1991 , b yth e Departmen t o f Energy . (iii ) Th e Administrato r shal l giv e expedite d consideratio n t o permi t application s fo r an y sourc e tha t satisfie s th e requirement s o f thi s subsectio n an

d i s grante d a nextensio n unde r §40 9 o f th e Clea nAi r Act . (38 ) "Reactivatio n o f a ver yclea ncoal-fire d electri c utilit ystea

mgenerating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio nassociate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i noperatio nfo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fromsuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e time o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t and a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act .P.6 7

- 1 5 -

3 . Sectio n 52.2 4 i s propose d t o b e amende d t o rea d a s follows : 52.2 4 Statutor

y restrictio

no nne w sources .

**** * (f ) * * * (5 ) * * * (iii ) Aphysica l chang e o r chang e i n th e metho d o f operatio n shal l no t include :
(h ) th e addition , replacemen t o r us e o f a pollutio n contro l projec t a t anexisting electri c utilit ystea m generatin g unit , unles s th e Administrato r determine s tha t suc haddition , replacement , o r us e render s th e uni t les s environmentall ybeneficial , an d except : (1 ) whe n th e Administrato r ha s reaso nt o believ e tha t th e pollutio n contro l projec t woul d resul t i n a n significan t ne t increas e i n representativ e actua l annua l emission s o f an ycriteri a pollutan t ove r level s use d fo r tha t sourc e i n th e mos t recen t ai r qualit yimpac t analysi s i nth e are a conducte d fo r th e purpos e o f Titl e I , i f any , an d (2 ) th e Administrato r determine s tha t th e increas e wil l caus e o r contribut e t o a violatio no f an yambien t standard , PS D increment , o r visibilit y limitation
. (i ) Th e installation , operation , cessation , o r remova l o f a temporarycleancoa l technologydemonstratio n project , provide d tha t th e projec t complie s with : (1 ) th e Stat e implementatio n pla n fo r th e Stat e i n whic hth e projec t i s located , an d (2 ) othe r reguirement s necessaryt o attai nan d maintai n th e nationa l ambien t ai r qualit ystandard s durin g th e projec t an

d afte r i t i s terminated
. (j ) Th e reactivatio n o f a veryclea ncoal-fire d electri c utilit ystea mgenerating unit
.P.6 8

- 1 6 -
(13 ) * * * (iv ) Fo r an

yemission s uni t (othe r tha n a nelectri c utilit ystea

mgenerating uni t specifie d i nparagrap h (v ) o f thi s subsection ) tha t ha s no t begu n norma l operation s o n a particula r date , actua l emission s shal l equa l th e potentia l t o emi t o f th e uni t o n tha t date . (v ) Fo r a n electri c utilit ystea mgeneratin g uni t (othe r tha n a ne wuni t o r th e replacemen t o f a n existing unit ) actua l emission s o f th e uni t following th e physica l o r operationa l chang e shal l equa l th e representativ e actua l annua l emission s o f th e unit
. (18 ) "Electri c utilit ystea m generating unit " mean s an ystea m electri c generatin g uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-third o f it s potentia l electri c outpu t capacit yan

d mor e tha n 2 5 MWelectrica l outpu t t o an yutilit y powe r distributio n systemfo r sale . Anystea msupplie d t o a stea mdistributio n systemfo r th e purpos e o f providin g stea mt o a steam-electri c generato r tha t woul d produc e electrica l energ yfo r sal e i s als o considere d i n determining th e electrica l energ y outpu t capacit yo f th e affecte d facility
. (19 ) "Representativ e actua l annua l emissions " mean s th e averag e rate , i n ton s pe r year , a t whic hth e sourc e i s projecte d t o emi t a pollutan t fo r th e two-yea r perio d afte r a physica l chang e o r chang e i n th e metho d o f operatio no f a unit , (or a differen t consecutiv e two-yea r perio d withi n1 0 year s afte r tha t change , wher e th e Administrato r determine s tha t suc hperio d i s mor e representativ e o f norma l sourc e operations) , considerin g th e effec t an

ysuc hchang e wil l hav e o n increasing o r decreasing th e hourl yemission s rat e an d o nprojecte d capacit yutilization
. I n projecting futur e emission s th e Administrato r shall : (i ) conside r al l relevan t information , including bu t no t limite d to , historica l operationa l data , th e company' s ow n representations , filing s wit hth e Stat e o r Federa l regulatoryauthorities , an d complianc e plan s unde r Titl e I V o f th e Clea n Ai r Act ; an d (ii ) exclude , i n calculating an yincreas e i nemission s tha t result s fromth e particula r physica l chang e o r chang e i nth e metho d o f operatio na t anelectri c utilit ystea mgenerating unit , tha t portio n o f th e unit' s emission s following th e chang e tha t i s attributabl e t o anincreas e i n projecte d capacit yutilizatio n a t th e uni t tha t i s unrelate d t o th e particula r change , including an yincrease d utilizatio n du eP.6 9

~ 1 7 ~ t o th e rat e o f electricit ydemand growt hfo r th e utilit y systema s a whole . (20 ) "Temporaryclea n coa l technolog ydemonstratio nproject " mean s a clea n coa l technologydemonstratio n projec t tha t i s operate d fo r a perio d o f five year s o r less , an d whic hcomplie s wit hth e Stat e implementatio nplan s fo r th e Stat e i nwhic hth e projec t i s locate d and othe r requirement s necessaryt o attai nand maintai n th e nationa l ambien t ai r qualit ystandard s durin g th e projec t an

d afte r i t i s terminated
. (21 ) "Clean coa l technology " mean s an ytechnology , includin g technologie s applie d a t th e precombustion , combustion , o r pos t combustio n stage , a t a ne wo r existing facilit ywhic hwil l achiev e significan t reduction s i n ai r emission s o f sulfu r dioxid e o r oxide s o f nitroge n associate d wit hth e utilizatio n o f coa l i n th e generatio n o f electricity , o r proces s stea m whic hwa s no t i n widesprea d use . a s o f Novembe r 15 , 1990 . (22 ) "Clean coa l technologydemonstratio n project " mean s a projec t usin g fund s (1 ) appropriate d unde r th e headin g 'Departmen t o f Energy-Clea nCoa l Technology' , up t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r (2 ) simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency . Th e Federa l contributio n fo r a qualifying projec t shal l b e a t leas t 2 0 percen t o f th e tota l cos t o f th e demonstratio nproject
. (23 ) "Reactivatio n o f a veryclean coal-fire d electri c utilit ysteamgeneratin g unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o f commercia l operation s b ya coal-fire d utilit y uni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i n operatio n fo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea nAi r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e tim e o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s systemo f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n8 5 percen t an

d a remova l efficiencyfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

dP.7 0

- 1 8 - (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act . (24 ) "Pollutio n contro l project " mean s an yphysica l chang e o r chang e i n th e metho d o f operation , a t an existing electri c utilit ystea

m generatin g uni t fo r purpose s o f reducing emission s fro msuc hunit
. Suc hchange s ar e limite d to : (i ) th e installatio no f conventiona l o r innovativ e pollutio n contro l technology , including bu t no t limite d t o advance d flu e ga s desulfurization , sorben t injectio nfo r sulfu r dioxid e an

d nitroge noxide s control s an d electrostati c precipitators ; (ii ) a physica l change , o r chang e i nth e metho d o f operation , t o accommodat e switching t o a fue l whic hi s les s polluting tha n th e fue l i n us e prio r t o th e chang e including , bu t no t limite d t o natura l ga s o r coa l re burning , co-firing o f natura l ga s an d othe r fuel s fo r th e purpos e o f controlling emissions ; (iii ) a permanen t clea ncoa l technologydemonstratio n projec t conducte d unde r Titl e II , sectio n101(d ) o f th e Furthe r Continuing Appropriation s Ac t o f 198 5 (sectio n 5903(d ) o f titl e 4 2 o f th e Unite d State s Code) , o r subsequen t appropriations , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstratio no f clea n coa l technology , o r simila r project s funde d through appropriation s fo r th e Environmenta l Protectio n Agency ; o r (iv ) a permanen t clea n coa l technologydemonstratio n projec t tha t constitute s a repowering project
.P.7 1

- 1 9 - Fo r th e reason s se t fort hi nth e preamble , Par t 6 0 o f Chapte r I o f Titl e 4 0 o f th e Cod e o f Federa l Regulation s i s propose d t o b e amende d a s follows : PART 60-STANDARD S O F PERFORMANCE FO

RNE W STATIONAR

YSOURCE S 1 . Th e authorit ycitatio n fo r Par t 6 0 i s amende d t o rea d a s follows : (T O B E ADDED ) 2 . Sectio n 60. 2 i s propose d t o b e amende d b yaddin g th e following definitions : "Clean coa l technologydemonstratio n project " mean s a projec t using fund s appropriate d unde r th e headin g 'Departmen t o f Energy
Clea n Coa l Technology' , u p t o a tota l amoun t o f $2,500,000,00 0 fo r commercia l demonstration s o f clea ncoa l technology , o r simila r project s funde d throughappropriation s fo r th e Environmenta l Protectio n Agency . "Electri c utilit ystea mgenerating unit " mean s an ystea melectri c generating uni t tha t i s constructe d fo r th e purpos e o f supplying mor e tha n one-thir d o f it s potentia l electri c outpu t capacit yand mor e tha n 2 5 MWelectrica l outpu t t o an yutilit ypowe r distributio n systemfo r sale . An ystea msupplie d t o a stea m distributio n systemfo r th e purpos e o f providin g stea mt o a steam-electri c generato r tha t woul d produc e electrica l energyfo r sal e i s als o considere d i n determining th e electrica l energy outpu t capacit yo f th e affecte d facility
. "Repowering " mean s replacemen t o f a n existing coal-fire d boile r wit hon e o f th e following clea ncoa l technologies : atmospheri c o r pressurize d fluidize d be d combustion , integrate d gasificatio n combine d cycle , magnetohydrodynamics , direc t an d indirec t coal

fire d turbines , integrate d gasificatio nfue l cells , o r a s determine d b

yth e Administrator , i n consultatio nwit hth e Secretaryo f Energy , a derivativ e o f on e o r mor e o f thes e technologies , an

d an yothe r technologycapabl e o f controllin g multipl e combustio n emission s simultaneousl ywit himprove d boile r o r generatio n efficienc yan d wit hsignificantl ygreate r wast e reductio n relativ e t o th e performanc e o f technologyi nwidesprea d commercia l us e a s o f Novembe r 15 , 1990 . Repowerin g shal l als o includ e an

yoi l and/o r gas-fire d uni t whic hha s bee n awarde d clea n coa l technologydemonstratio nfunding a s o f January1 , 1991 , b yth e Departmen t o f Energy . "Reactivatio n o f a veryclea n coal-fire d electri c utilit ystea m generating unit " mean s an yphysica l chang e o r chang e i n th e metho d o f operatio n associate d wit hth e commencemen t o fP.7 2

- 2 0 - commercia l operation s b ya coal-fire d utilit yuni t afte r a perio d o f discontinue d operatio n wher e th e unit : (i ) ha s no t bee n i n operatio n fo r th e two-yea r perio d prio r t o th e enactmen t o f th e Clea n Ai r Ac t Amendment s o f 1990 , an

d th e emission s fro msuc huni t continu e t o b e carrie d i n th e permitting authority' s emission s inventorya t th e tim e o f enactment ; (ii ) wa s equippe d prio r t o shut-dow n wit ha continuou s system o f emission s contro l tha t achieve s a remova l efficienc yfo r sulfu r dioxid e o f n o les s tha n 8 5 percen t an

d a remova l efficienc yfo r particulate s o f n o les s tha n 9 8 percent ; (iii ) i s equippe d wit hlow-NOxburner s prio r t o th e time o f commencemen t o f operation s following reactivation ; an

d (iv ) i s otherwis e i ncomplianc e wit hth e requirement s o f th e Clea n Ai r Act . 3 . Sectio n 60.1 4 i s propose d t o b e amende d t o read a s follows : 60.1 4 MODIFICATION . **** * (h ) N o physica l change , o r chang e i nth e metho d o f operation , a t an existing electri c utilit ystea mgeneratin g uni t shal l b e treate d a s a modificatio n fo r th e purpose s o f thi s sectio n provide d tha t suc hchang e doe s no t increas e th e maximu m hourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e th e maximu

m hourl yemission s achievabl e a t tha t uni t during th e five year s prio r t o th e change . (i ) Repowerin g project s tha t ar e awarde d funding fro mth e Departmen t o f Energya s permanen t clea n coa l technology demonstratio n project s (or simila r project s funde d b yEPA ) ar e exemp t fro

m th e requirement s o f thi s sectio nprovide d tha t suc h chang e doe s no t increas e th e maximu m hourl yemission s o f an y pollutan t regulate d unde r thi s sectio n abov e th e maximu m hourl y emission s achievabl e a t tha t uni t during th e fiv e year s prio r t o th e change . (j)(l ) Repowering project s tha t qualif yfo r anextensio n unde r § 409(b ) o f th e Clea nAi r Ac t ar e exemp t fro m th e requirement s o f thi s section , provide d tha t suc hchang e doe s no t increas e th e actua l hourl yemission s o f an ypollutan t regulate d unde r thi s sectio n abov e th e maximu mhourl yemission s achievabl e a t tha t uni t during th e five year s prio r t o th e change .